You're watching...
Former SEC Chairman Harvey Pitt argues the SEC has been used by lawmakers to achieve political and social goals.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
The -- of securities laws and agencies like the SEC is to ensure that capitalism flourishes and our democracy.
But a former head of the SEC says that.
That agenda is getting buried by those who want to use the SEC and securities -- To further political and social goals that could actually weaken capitalism that man.
Is Harvey Pitt is the former chairman of the SEC and he joins us now.
Partly it's it's quite a charge we have heard charges that the administration has used other regulatory bodies for example the EPA to push social and and political agendas do you say the same is happening with the SEC how.
Well I think it's happening in a number of ways first of all love the legislative agenda that's been pursued has gotten the SEC involved with issues that are far remote from capitalism.
And facilitating capitalism.
The SEC should be about restoring full free and fair market.
And that's not happening right.
Now so the prime directive of the SEC -- always been securing the economic interest of shareholders and is very simple -- saying that that's been replaced.
By pursuing social interest in political.
Now you also have all these activist shareholder meetings and and the proxy.
Movement and so forth organizations like the IS SE Institutional Shareholder Services.
Which had been used -- by shareholders in the past -- -- -- -- has that sort of been hijacked by by people with more political goals the occupy.
Wall Street people folks like that.
It has there is clearly a movement to get corporations.
And their shareholders.
To would get invested in issues of the social agenda.
And it really doesn't matter what side of those issues you're wrong.
Basically the goal of corporations.
-- to make money for their shareholders.
That's the primary goal and that's what will produce a better economy and more jobs for our citizens.
But that's getting lost and a lot of the actions we're now seeing.
Well meanwhile you have to Facebook.
That'd be IB IPO the -- with FaceBook you have the JPMorgan trade you have.
Flash crash is -- -- lord knows what happened with the oil yesterday so.
Are are these.
Real serious concerns economic concerns being overlooked.
By the SEC because their focus on these other matter.
I think they are I think the question of the role of technology.
And the proper functioning of our markets.
It is a critical issue that needs to be resolved we cannot have these kinds of failures.
Due to technology and not have appropriated considered responses from the regulators.
Now -- you have used some very tough language for your your fellows -- the SEC by the way we should mention your.
Your head of of -- historical society that looks at the SEC BS EC historical society so.
You've looked at this thing in the context of its entire history but you say the SEC.
At present is completely dysfunctional.
What leads you to say that.
Well you have an issue with respect to money market mutual funds.
And the question about whether there should be more regulation or not.
And whether you support the issue of the need for more regulation and the commissioners could not agree on putting out a rule proposal.
Even if there were -- majority opposed to it.
They could not come up with a compromise.
And that suggests that the agency.
Has become polarized.
And is not functioning the way it was intended to function well.
Of the by the way we have to use this is -- last question it is supposed to be nonpartisan agency.
Other five members of the SEC only three of them can be from any particular political party so.
Our it used to be that we have sort of majority rules but are we having these 32 splits right now is that is that how -- -- breaking down.
We seem to be back to three to split its and that suggests that the art of compromise is being lost.
Harvey Pitt we have to have you come back and explain how to solve the situation Harvey Pitt former SEC chairman great to see -- -- thank you so much to be with him -- part of.
