Nine Decades of Investor Protection and Robust Market Oversight

Good afternoon and a warm welcome to all of you.[1]

We proudly mark the Commission’s nine decades of effective service to America’s investing public.

During the Great Depression, President Franklin Roosevelt sought to protect the public against the rampant investment frauds of the 1920s and worked with Congress to establish this great Commission. It wasn’t always popular.

There was significant Wall Street opposition to the ’34 Act that created the Commission. But I want to tell you a story about this opposition.

Back in 2002, I served as a House Financial Services Committee staffer. Congressman Barney Frank asked me to put together a legislative history of the ’34 Act. I included lots of quotes from prominent business leaders of the era who worried that the Act would do much harm to our capital markets.

If you followed Congressman Frank’s career in Congress, you would know that he had a unique talent for clever debate and for making a point with a bit of showmanship and wit. So you might imagine what happened next.

At a meeting of the Sarbanes-Oxley Act conference committee, Cong. Frank quoted business leaders worried about the prospect of stepped-up market oversight. But he didn’t tell everyone right away that he was quoting business leaders from the 1930s. Instead, he surprised them with the fact that the doom-and-gloom scenarios of the 1930s sounded very similar to those being voiced in the 2000s.

The federal securities laws have paid off and have made it possible for the Commission to become one of the great success stories in government. The Commission undertakes difficult, often complicated – and sometimes unpopular – work, but this work has benefited the investing public, our capital markets, and our country for the nine decades being celebrated today.

And it’s turned out to be an excellent deal for the taxpayers. With its $2 billion budget paid for by fees assessed on market participants, it is budget neutral.

In 2022, the Commission recovered three times the size of its budget in enforcement actions alone – the most in history. Where possible, we returned those funds to wronged investors.

To me, this is government at its best. Making things right for people who are harmed by the misconduct of others—the people we have a duty to serve and to protect.

And we cannot let up. Congress gave the Commission powerful and effective authorities that are applied fairly and responsibly and that are designed to serve the public interest above all.

The existing body of securities law is the law of the land. We have an obligation to follow it and to enforce it, without fear or favor.

This framework has succeeded in protecting investors against all forms of market misconduct. It isn’t broken and hasn’t failed so there’s no good reason to weaken it.

I am unable to be there in person today because of another celebration, near and dear to my heart: my son Diego’s high school graduation.

I’m proud of his accomplishment. As he makes decisions about his future, I’m also proud to be able to tell him that what we do here, and what is being celebrated today, is all about his financial future and that of the millions of his peers across our country.

What a special way to mark this day. Chair Gary Gensler has convened impressive panels of former SEC chairs and renowned scholars. I’ve learned so much from Gary about the Commission’s history and about our capital markets. What better way to honor his pursuit of excellence in fulfilling our mission than through this celebration.

And what a privilege to also be joined by former Maryland Lieutenant Governor, Kathleen Kennedy Townsend, who recently advised the U.S. Labor Secretary on retirement security matters. With a direct family connection to the Commission’s first chair, Joseph Kennedy, she brings a unique perspective to the discussion today.

Thank you for the opportunity to offer a few thoughts and I wish you all the best.