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Schapiro: Expect More Crisis-Related Lawsuits to Continue

Thursday, 21 Jul 2011 12:57 AM

By Forrest Jones

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The Securities and Exchange Commission (SEC) is expecting to file more civil lawsuits stemming from the 2008 crisis, says SEC Chairman Mary Schapiro.

"You’ll continue to see cases coming out of the financial crisis from the SEC utilizing the full extent of our civil enforcement authority," Schapiro tells CNBC, without providing details concerning the mounting wave of legal action.

"It's not over yet."

Since the Lehman bankruptcy the SEC has "brought more than 70 matters against individuals and firms coming out of the financial crisis."

The Dodd-Frank financial reform law, which increases regulation on the financial sector, requires the SEC to write 90 or so regulations involving compliance and oversight of the financial industry, and could add to the agency's quiver of legal weapons to cast blame for the crisis.

"We have really broad responsibilities under Dodd-Frank, so we try to stay focused," Schapiro says.

Dodd-Frank is now a year old, and critics say it goes overboard and prohibits recovery via excessive regulation.

"Dodd-Frank burdens the private sector," says Representative Spencer Bachus, the Alabama Republican who heads the Financial Services Committee, according to Reuters.

"The vast majority of these rules have created an atmosphere of uncertainty in which innovators, job creators, and lenders can't put their ideas and capital to work."

Others says increased government intrusion in the private sector will help keep unemployment rates elevated.

"What a difference a year makes, huh? Setting the United States on the collision course for economic mediocrity and a prolonged period of high unemployment," says Representative Scott Garrett, a New Jersey Republican, Reuters adds.

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