Occupy the SEC

Last updated
Occupy the SEC
Part of the "Occupy" protests
Occupy the SEC logo.png
DateOctober 2011 – ongoing
Location
New York City, New York, United States
Caused by Financial regulatory activity, corporate influence over government, economic inequality, inter alia.
Methods Demonstration, activism, correspondence
StatusOngoing
www.occupythesec.org

Occupy the SEC (OSEC) is an activist group which aims to influence financial regulators to work for the public interest. The "SEC" in its name refers to the US Securities and Exchange Commission, but OSEC's scope covers all financial regulatory activity. OSEC was formed and developed as an outgrowth and working group of Occupy Wall Street. [1]

Contents

Among its members are employees or former employees of some of the largest financial firms. [2] They have been described as "a counterweight to the deep-pocket lobbying push" by financial firms against reform. [2]

History

OSEC was founded in October 2011 as a working group of Occupy Wall Street, [1] the protest movement which started in Zuccotti Park in Lower Manhattan on September 17, 2011. After initially meeting on a bench in Zuccotti Park, late October 2011, [2] the group evolved into a bi-weekly "book club" at a diner near the park, [3] and then met weekly in the atrium of 60 Wall Street. [4] The group first gained attention after tackling a response to the proposed Volcker Rule, part of the Dodd-Frank Act of 2010, that would severely limit proprietary trading at commercial banks, similar to the Glass Steagall Act of 1933. OSEC drafted answers to questions regarding the proposed rule, which were included in a 325-page comment letter submitted to the SEC on February 13, 2012. [5] [6]

Volcker Rule comment letter and follow-up

Submitted by OSEC to the U.S. Securities and Exchange Commission on February 13, 2012, the 325-page comment letter [6] [7] was hailed as "amazing", describing how the authors went through the rule "line by line, explaining where it's useless and where it can and should be improved." [5] Others suggested OSEC was doing "the day-in, day-out grind of policymaking—calling legislators, responding to regulatory agencies, learning the issues..." [8] OSEC's comment letter was close to the lengthiest and most detailed of the 16,000 letters sent to the SEC, [4] with the vast majority coming from industry insiders. This letter was cited 284 times by the Federal Reserve Board when the regulations were ultimately put into effect in 2013. [9]

On February 26, 2013, OSEC filed a suit in the Eastern District Court of New York naming the Federal Reserve, the SEC, CFTC, OCC, FDIC, and the U.S. Department of the Treasury calling for implementation of the "Volcker Rule" (Section 619 of the Dodd-Frank Act of 2010). [10]

Ongoing activities

After the Volcker Rule comment letter, the group continued to engage in regulatory matters where it felt that the 99% needed to be represented.

In June 2012, Occupy the SEC submitted a 7-page letter to the Senate Banking Committee prior to JP Morgan CEO Jamie Dimon's testimony. [11]

In December 2012, OSEC submitted an amicus brief in the case of Gabelli v. SEC, in which the Supreme Court will decide when the statute of limitations clock begins for certain fraud actions brought by the government – from the time the fraud was last committed or from the time the fraud was discovered. [12]

On February 15, 2013, OSEC submitted a formal comment letter on money market fund reform to the Financial Stability Oversight Council (FSOC). The letter urged FSOC to move forward with money market reforms, supported the proposals for floating NAVs and buffers to absorb losses but pointed out that broader reforms were required as well. [13] The letter was cited several times by the SEC when they promulgated reforms to market fund regulations. [14]

In July 2013, OSEC submitted an amicus brief to the US Supreme Court regarding overly broad interpretations of securities litigation laws. [15]

In September 2014, OSEC submitted an amicus brief to the US Supreme Court in the case of Omnicare v. Laborers Pension Fund supporting the rights to sue securities issuers and their agents for material misrepresentation. [16]

In March 2015, OSEC filed an amicus brief to the Supreme Court in Bank of America N.A. v. Caulkett, and Bank of America N.A. v. Toledo-Cardona. OSEC also filed comment letters relating to the systemic risks created or propagated by asset managers to the Financial Stability Oversight Council (FSOC) and in May a letter on designation of asset managers as SIFIs (Systemically Important Financial Institutions) to the global Financial Stability Board (FSB). [17] [18] [19]

In November 2015, the group submitted a comment letter to the CFTC on aggregate position limits. They also organized an effort to petition Congress to oppose a bill backed by the Koch brothers. It generated over 1,000 letters. [20] [21] [22]

Reception

According to The Economist, Occupy the SEC's "contributions to the debate on regulatory reform (including a tome on the Volcker Rule) have been well-received even by some leading regulators". [23]

Related Research Articles

U.S. Securities and Exchange Commission Government agency overseeing stock exchanges

The U.S. Securities and Exchange Commission (SEC) is a large independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market manipulation.

Commodity Futures Trading Commission Government agency

The Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974, that regulates the U.S. derivatives markets, which includes futures, swaps, and certain kinds of options.

Commodity Futures Modernization Act of 2000

The Commodity Futures Modernization Act of 2000 (CFMA) is United States federal legislation that ensured financial products known as over-the-counter (OTC) derivatives remained unregulated. It was signed into law on December 21, 2000 by President Bill Clinton. It clarified the law so most OTC derivative transactions between "sophisticated parties" would not be regulated as "futures" under the Commodity Exchange Act of 1936 (CEA) or as "securities" under the federal securities laws. Instead, the major dealers of those products would continue to have their dealings in OTC derivatives supervised by their federal regulators under general "safety and soundness" standards. The Commodity Futures Trading Commission's (CFTC) desire to have "functional regulation" of the market was also rejected. Instead, the CFTC would continue to do "entity-based supervision of OTC derivatives dealers". The CFMA's treatment of OTC derivatives such as credit default swaps has become controversial, as those derivatives played a major role in the financial crisis of 2008 and the subsequent 2008–2012 global recession.

Gary Gensler American banker

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Options Clearing Corporation Financial services business

Options Clearing Corporation (OCC) is a United States clearing house based in Chicago. It specializes in equity derivatives clearing, providing central counterparty (CCP) clearing and settlement services to 16 exchanges. Started by Wayne Luthringshausen and carried on by Michael Cahill, trust in the company was built. Instruments include options, financial and commodity futures, security futures and securities lending transactions.

Sir Paul Tucker is a British economist, central banker, and author. He was formerly the Deputy Governor of the Bank of England, with responsibility for financial stability, and served on the Bank's Monetary Policy Committee from June 2002 until October 2013 and its interim and then full Financial Policy Committee from June 2011. In November 2012 he was turned down for the position of governor in favour of Mark Carney. In June 2013, Tucker announced that he would leave the Bank of England, and later that he would be moving to Harvard. He was knighted in the 2014 New Year Honours for services to central banking. His book, Unelected Power, was published in May 2018.

The Committee on Capital Markets Regulation is an independent and nonpartisan 501(c)(3) research organization financed by contributions from individuals, foundations, and corporations.

Dodd–Frank Wall Street Reform and Consumer Protection Act Regulatory act implemented by the Obama Administration after the 2008 financial crisis.

The Dodd–Frank Wall Street Reform and Consumer Protection Act is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Recession, and it made changes affecting all federal financial regulatory agencies and almost every part of the nation's financial services industry.

Volcker Rule

The Volcker Rule refers to § 619 of the Dodd–Frank Wall Street Reform and Consumer Protection Act. The rule was originally proposed by American economist and former United States Federal Reserve Chairman Paul Volcker to restrict United States banks from making certain kinds of speculative investments that do not benefit their customers. Volcker argued that such speculative activity played a key role in the financial crisis of 2007–2008. The rule is often referred to as a ban on proprietary trading by commercial banks, whereby deposits are used to trade on the bank's own accounts, although a number of exceptions to this ban were included in the Dodd-Frank law.

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Financial Stability Oversight Council

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Office of Financial Research

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A systemically important financial institution (SIFI) is a bank, insurance company, or other financial institution whose failure might trigger a financial crisis. They are colloquially referred to as "too big to fail".

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Systemically important financial market utilities (SIFMUs) are entities whose failure or disruption could threaten the stability of the United States financial system. To date eight entities in the U.S. have been officially designated SIFMUs.

Richard Bookstaber

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Spoofing is a disruptive algorithmic trading activity employed by traders to outpace other market participants and to manipulate markets. Spoofers feign interest in trading futures, stocks and other products in financial markets creating an illusion of the demand and supply of the traded asset. In an order driven market, spoofers post a relatively large number of limit orders on one side of the limit order book to make other market participants believe that there is pressure to sell or to buy the asset.

Heath Tarbert American lawyer and government official

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References

  1. 1 2 Johnson, Simon (January 16, 2014). "An Occupy Wall Street Offshoot Has Its Day". The New York Times . Retrieved 12 April 2014.
  2. 1 2 3 Khimm, Suzy (April 27, 2012). "Occupy the regulatory system!". The Washington Post . Retrieved 12 April 2014.
  3. ↑ Weise, Karen (February 14, 2012). "Occupy the SEC Weighs In on the Volcker Rule". Bloomberg . Retrieved 12 April 2014.
  4. 1 2 Antilla, Susan (February 29, 2012). "Occupy Vigilantes Write New Volcker Rule Script: Susan Antilla". Bloomberg. Retrieved 12 April 2014.
  5. 1 2 Salmon, Felix (February 14, 2012). "Occupy's amazing Volcker Rule letter". Reuters . Archived from the original on February 15, 2012. Retrieved 12 April 2014.
  6. 1 2 "OSEC comment letter re: Volcker Rule". 13 February 2012. Retrieved 2013-02-11.
  7. ↑ Quart, Alissa (2013). Republic of Outsiders: The Power of Amateurs, Dreamers and Rebels. The New Press. pp. (unlisted). ISBN   978-1595588944.
  8. ↑ Yglesias, Matthew (February 14, 2012). "Occupy the SEC Releases 325-Page Comment Letter on "Volcker Rule" Proposals". Slate.
  9. ↑ DePillis, Lydia (December 11, 2013). "The Volcker rule cites the Occupy Movement 284 times". Washington Post. Retrieved 25 January 2015.
  10. ↑ Occupy the SEC (February 27, 2013). "Occupy the SEC Sues Federal Reserve, SEC, CFTC, OCC, FDIC and U.S. Treasury Over Volcker Rule Delays". Occupy the SEC blog. Archived from the original on 5 March 2013. Retrieved 12 April 2014.
  11. ↑ Berman, Jillian (June 12, 2012). "'Occupy The SEC' Has Exactly 11 Questions For Jamie Dimon". Huffington Post . Retrieved 12 April 2014.
  12. ↑ "Brief of Occupy the SEC as Amicus Curiae in Support of Respondent" (PDF). American Bar Association . Retrieved 12 April 2014.
  13. ↑ "OSEC Comment to FSOC on MMFs". 15 February 2013. Retrieved 2015-01-25.
  14. ↑ "SEC MMF Reform Rule". 14 October 2014. Retrieved 2015-01-25.
  15. ↑ "OSEC Troice Amicus" (PDF). 29 July 2013. Retrieved 2015-01-25.
  16. ↑ "OSEC Omnicare v Laborers Amicus" (PDF). 28 August 2014. Retrieved 2015-01-25.
  17. ↑ "OSEC amicus brief in Bank of America v. Caulkett" (PDF). Retrieved March 31, 2015.
  18. ↑ "OSEC comment to FSOC on asset management and systemic risk" . Retrieved March 31, 2015.
  19. ↑ "OSEC comment to FSB on asset management and systemic risk" (PDF). Retrieved June 15, 2015.
  20. ↑ "OSEC comment to CFTC on aggregate position limits" . Retrieved 8 January 2016.
  21. ↑ "Yahoo finance article on HR 4002". finance.yahoo.com. Retrieved 8 January 2016.
  22. ↑ "Petition to oppose HR 4002" . Retrieved 8 January 2016.
  23. ↑ "Occupy Wall Street: Afterthoughts". The Economist . September 22, 2012. Retrieved 12 April 2014.

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