New Bill Would Make it Harder for Lawbreaking Companies to Get SEC Waivers
Businesses throughout Houston need to understand and comply with all regulations established by the Securities and Exchange Commission (SEC). Failure to comply with securities regulations can result in criminal and civil penalties. A new bill being proposed in Congress would also make it more difficult for companies who have violated certain types of securities laws to raise money in the market.
A business law attorney in Texas can provide assistance to companies to ensure security regulations are fully understood and followed. You need to protect your business, which means understanding how the laws apply to you and following them when it comes to financial disclosures and securities transactions.
New Bill Aims to Limit S.E.C. Waivers for Lawbreaking Companies
When the Securities and Exchange Commission determines that a company has violated any SEC regulations or any securities laws, the SEC can disqualify the business from issuing certain kinds of securities. Not only does this impact the ability of the company to make money, but it can also affect client activities.
Firms generally apply for waivers from these limitations because the restrictions can make it hard for a business to successfully operate. The SEC often grants waivers to companies, even to those businesses that have broken many laws. For example, the New York Times reports that a waiver had been granted to one company that had more than 30 regulatory actions against it over just a decade.
Consumer advocates have spoken out against these waivers, arguing that more should be done to deter wrongdoing on the part of corporations. The ban on issuing securities after breaking the law is intended to act as a deterrent to prevent companies from violating the rules, and it does not work effectively to do this if companies know that they can just apply for a waiver and will likely receive it.
Now, House representative Maxine Waters has announced proposed legislation that would make it harder for law-breaking companies to get waivers. The new bill would require the SEC to keep public records of any waiver requests that are made, as well as to make denials of requests public. The public will be given an opportunity to comment on whether a company should be granted a waiver if the bill passes, and the public can even ask for a hearing about the issue. The bill would also move responsibility for granting waivers to the SEC’s five commissioners. These commissioners have been handling many recent waiver requests, but the current law also allows staff lawyers for the SEC to grant a waiver.
The legislation has an uphill battle and is unlikely to pass while the Republicans have the majority in the house. Still, companies should be aware that lawmakers are looking to crack down on securities violations and impose potentially harsher consequences if your business is found to have broken securities laws. Be sure to talk to an attorney about what your legal obligations are so you can avoid legal problems.
Call Brewer & Prichard P.C. today at 800-445-8710 to schedule a consultation. Serving Texas, the greater Houston metropolitan area, Galveston Island, Montrose and surrounding areas.Â
