As the government shutdown nears the end of its third week, the U.S. Securities and Exchange Commission is still largely inoperable. Amid the partisan sparring, financial experts are concerned the continued lack of market oversight and regulatory enforcement are creating conditions ripe for misconduct.
As noted in a statement posted on the SEC website, the agency is adhering to plans for bare bones operations during the lapse in appropriations. As of December 27, and until the shutdown ends, the SEC will have only a “very limited number of staff” available.
Though the agency functions as a conduit for investor protection and market integrity, it does not currently have the manpower to perform all its essential functions. Instead, the SEC states it’s using what little staff it has to respond to emergency situations, and continue the operation of certain systems, such as EDGAR, its public database of SEC filings.
The statement, which is brief, does little to instill confidence or detract from the fact that investors are less protected now than they were prior to the shutdown.
Since 1976, there have been more than 20 gaps in federal government funding, 10 of which also involved furloughed federal employees. While shuttering the government may seem like a way to save taxpayers money, it can cause far more harm than good, both in the short and long-term. Sending workers home, not paying debts, and not collecting fees all comes with a cost – and that cost escalates each day federal agencies remained closed.
That’s objectively bad from a broad number of perspectives, whether it’s placing strain on employees and families or covering interest, back pay, and increased costs when all is said and done. As reported by Investment News, it’s also a downright dangerous situation for investors, especially with investment fraud on the rise.
Here are a few reasons why the SEC shutdown puts investors at risk:
It’s an unfortunate reality that as we wait for a deal to reopen the government and fund important agencies, risks for investment fraud and losses, among many other problematic issues, only increase. Our team at Meyer Wilson, however, will continue to do what we do each day, every day: protect investors who’ve suffered losses as they seek justice following fraud, misconduct, much more. If you have questions about our services or a potential case, contact us online or call (614) 532-4576. Our firm serves clients nationwide.