SEC Actions During Turmoil in Credit Markets

The mission of the Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

During the current turmoil in the credit markets, the SEC has worked closely with the Department of the Treasury, the Federal Reserve, and other regulators in the U.S. and around the world to protect investors and the markets.

The SEC administers the federal securities laws, requires disclosure by public companies, and brings enforcement actions against securities law violators.

While other federal and state agencies are legally responsible for regulating mortgage lending and the credit markets, the SEC has taken the following decisive actions to address the extraordinary challenges caused by the current credit crisis:

• Undertaken sweeping enforcement measures against market manipulation.
• Adopted a package of measures to strengthen investor protections against naked short selling, including rules requiring a hard T+3 close-out, eliminating the options market maker exception of Regulation SHO and expressly targeting fraud in short selling transactions.
• Issued an emergency order to enhance protections against naked short selling in the securities of primary dealers, Fannie Mae, and Freddie Mac.
• In close coordination with regulators around the world, took temporary emergency action to ban short selling in financial securities.
• Announced emergency plans for a rule to ensure public disclosure of short selling positions of hedge funds and other institutional money managers.
• Began a study on mark-to-market accounting standards.
• The Division of Corporation Finance has asked financial institutions to provide additional disclosure regarding off-balance sheet arrangements and the application of fair value to financial instruments.
• The Office of Chief Accountant in coordination with FASB staff issued additional guidance to clarify issues regarding fair value accounting.
• Provided guidance to banks about how to account for credit support of money market funds.
• Written rules to strengthen the regulation of credit rating agencies, and performed examinations that have led to new rules to reduce rating agency conflicts-of-interest.
• Enforcement Division announced what will be the largest settlements in the history of the SEC for investors who bought auction rate securities from Citigroup, UBS, Wachovia, Merrill Lynch, RBS Capital Markets Corp., and Bank of America.
• Brought a landmark enforcement action against a trader who spread false rumors designed to drive down the price of stock.
• Initiated exams of the effectiveness of broker-dealers' controls to prevent the spread of false information intended to manipulate securities prices.
• Entered into a Memorandum of Understanding with the Federal Reserve, to make sure key federal financial regulators share information and coordinate regulatory activities in important areas of common interest.
• Continues to look at lessons from the credit crisis and determine ways to give investors more transparent, useful, and timely information.
• SEC Chairman Christopher Cox has asked Congress to provide the statutory authority necessary for government oversight of the $58 trillion credit default swaps market.

http://www.sec.gov/news/press/sec-actions.htm