The U.S. Securities and Exchange Commission is the chief regulator of exchanges, broker-dealers, investment advisers and mutual funds. It operates five divisions: Corporation Finance, Enforcement, Investment Management, Trading and Markets, and Risk, Strategy and Financial Innovation. Based in Washington, D.C., the SEC has 11 regional offices throughout the U.S. and employs 3,500 staff around the country.
Mary Schapiro took over as chairman in January 2009 from Christopher Cox. Since the financial crisis, she’s had to steer the agency as it implements Dodd-Frank financial regulation reform and build cases against firms such as Goldman Sachs, Citigroup and J.P. Morgan for their actions during the financial crisis. After encountering criticism for failing to police Wall Street effectively and missing the Bernard Madoff Ponzi scheme, the agency has levied fines against both individuals and institutions over the past few years. It has proposed or adopted rules for about three quarters of the 90 provisions of Dodd-Frank that require SEC rulemaking.
The SEC has invested money and resources into its enforcement division, which brought 735 enforcement actions in the fiscal year ending September 30, 2011, its highest number. Under division director Robert Khuzami, the unit has begun an informal inquiry into the private equity industry. Khuzami led the charge in creating specialized units within the enforcement division that include asset management (covering mutual funds, hedge funds, private-equity firms, investment advisers and investment companies); market abuse (such as insider trading); structured and new products; foreign corrupt practices; and municipal securities and public pensions. As part of that overhaul, staff were retrained and outside industry experts hired to help with investigations.
The agency also implemented a new whistleblower program designed to improve the efficacy of tips and referrals for investigations.
Because of budget freezes in 2010 and 2011, the SEC has not been able to bring on the staff it wanted to implement Dodd-Frank. A March 2011 report from Boston Consulting Group commissioned by the SEC to report on its organizational progress found the agency was understaffed by at least 400 people. Since 2005, budget freezes have led to a 10% reduction in staff.
The SEC is operating on a $1.3 billion budget in 2012 despite Dodd-Frank’s recommendations of $1.5 billion for the year. While the agency had wanted to bring on 780 positions in FY 2012, because of the budget that was passed by Congress, it could only bring on 380.
The agency filled some vacancies and brought on external hires for areas such as quantitative analysis, algorithmic computerized trading and structured products.
Chairman Mary Schapiro recently asked Congress for an 18.5% increase for fiscal year 2013, which begins in October. The agency needs the funds to update antiquated technology and hire new staff. The agency aims to bring on nearly 700 employees in FY 2013 for enforcement, examinations, and other divisions.
The SEC’s careers portal offers detailed info on career paths, including attorneys, compliance examiners, accountants and economists. It emphasizes a work/life balance with perks such as flex hours. And of course working for Uncle Sam yields excellent employee benefits.