The U.S. Chamber of Commerce said that the Securities and Exchange Commission is overstepping its bounds in seeking to punish corporate wrongdoing.
In a report, the chamber, which lobbies for 3 million U.S. companies and 830 business associations and has been one of the SEC's most vocal critics, recommended that the agency appoint an advisory committee to study its enforcement practices.
Among the chamber's specific concerns were:
- The SEC putting" intense pressure on public companies to waive attorney-client privilege and work product protection during SEC investigations;"
- The agency imposing " large penalties on public companies as opposed to individual wrongdoers;" and,
- The SEC's practice of performing industry sweeps, where "corporations in a targeted industry must respond to broad information requests without an indication of wrongdoing."
The chamber also cited nine federal court rulings and administrative law judgments last year and in 2004 that questioned how the agency interpreted law, presented evidence and determined when defendants knowingly broke securities rules."While the SEC has made significant progress in providing more transparent guidelines to determine corporate penalties, its enforcement process is not always fair, consistently and appropriately applied, or respectful of due process," said chamber president and chief executive Tom Donohue, in a statement.
The full report can be viewed at www.uschamber.com/publications/reports/0603sec.htm.
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