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Politico: Republicans back move to help SEC recoup cash for harmed investors
House Republicans today expressed willingness to partner with Democrats in advancing legislation that would overturn a Supreme Court decision and help the SEC collect cash from wrongdoers.
At a House Financial Services hearing today, Rep. Bill Huizenga (R-Mich.) said the SEC needs to be able recover ill-gotten gains and distribute those funds to harmed investors.
"I am supportive in concept," Huizenga said.
The hearing was held in part to consider draft legislation that would give the SEC more time to collect ill-gotten gains. Democrats are pushing legislation that would overturn the Supreme Court's unanimous 2017 Kokesh v. SEC decision, which capped the SEC's ability to recoup investor losses to a five-year statute of limitations.
As a result of that decision, the SEC says it might forgo up to $900 million in disgorgement that otherwise could go to harmed investors. In a speech earlier this month, Chairman Jay Clayton said, "I am troubled by the substantial amount of losses that we may not be able to recover for retail investors."
In March, Sen. John Kennedy (R-La.) partnered with Sen. Mark Warner (D-Va.) to introduce a bill, S. 799 (116), to remedy the Kokesh decision. Their bill would extend the window of time for which the SEC can pursue gains for harmed investors to 10 years from five years.
Huizenga's support for the SEC on Kokesh relief contrasted with his opposition to the other bills the Democrats were considering that would strengthen the regulator's enforcement.
"These draft proposals that we are discussing today will do very little to help put investors first," Huizenga said. "Instead, they create more barriers to capital formation and limit investment opportunities for American workers."
This article originally was originally published by Politico on June 19th. (subscription required)