Securities and Exchange commissioner speaks in Dalton

Published 12:00 pm Friday, March 29, 2024

United States Securities and Exchange Commissioner Hester M. Peirce gave opening remarks for a joint investors roundtables event at Dalton State College on Thursday, March 28.

“I should tell you that my views today represent my own views as a commissioner, not necessarily those of the SEC or my fellow commissioners,” she began her introduction. “We are a politically balanced commission, which means that no more than three of us can be from the president’s party … we are able to represent a wide range of views and different approaches to how you think about securities regulation.”

Partnering with the SEC for the roundtables event was the North American Securities Administrators Association and the Georgia Secretary of State’s Office.

“We are regulating the capital markets for the benefit of the American people and we have to do it in a way that reflects what you all think,” Peirce said.

Peirce, a Trump appointee, joined the commission in 2018.

“One of the things I’ve learned in that time is the importance of sharing the responsibility of the job that we carry out,” Peirce continued. “We need to have the benefit of the research, the academic research that you all do, that can help us think through difficult questions about how to regulate new things or even know how to regulate the existing financial industries.”

Opportunists and exploiters, Peirce said, are always looking for new ways to take advantage of others.

“So we’re always looking for ways that we can better use our limited resources to combat the bad and to encourage the good,” she said. “To encourage people to learn about investing, to exercise skepticism, and to encourage people who are serving people — the financial professionals who are serving people — to do their jobs better, to serve people better, to be more responsive to the needs of their investors, the clients they are serving.”

Participating in the Dalton State College event via videoconference was Saba Qamar, investor advocate for the Public Company Accounting Oversight Board.

“Creating the PCAOB was a response to high-profile corporate accounting scandals of the 1990s and early 2000s,” she said. “The collapse of Enron in 2001 is a stark example of the importance of auditors in cutting through the hype and protecting investors.”

At one point, the notorious energy company ranked in the top 10 of the Fortune Global 500.

Over the span of roughly one year, Enron shares collapsed from almost $91 per share to just $1. The Texas-based company — in the midst of a multibillion-dollar lawsuit — officially filed for Chapter 11 bankruptcy in December 2001.

“Unbeknownst to the investment public, it’s huge reputation concealed earnings fraud, significant bad debt,” Qamar said. “When the scandal broke, the value of Enron’s shares plummeted, investors lost billions of dollars and 20,000 employees of Enron lost their jobs.”

The PCAOB, she said, was created via the federal Sarbanes-Oxley Act of 2002.

“Last year, the PCAOB inspected auditing firms around the world, which requires a high degree of skill sets and expertise of my colleagues,” Qamar continued. “In addition to creating the office of investigator advocate, the board reconstituted the investor advisory group and started implementing its strategic plan centered around modernizing the PCAOB standards, enhancing inspections and strengthening enforcements.”

And in 2023, Qamar said there were more formal actions on rule-making than any previous year in the board’s history.

“Likewise, enforcement actions have increased, as have the monetary sanctions imposed for violations,” she said.