Rep. Porter Bill to Increase Consequences for Companies Ripping Investors Off Clears Key Committee Hurdle
WASHINGTON – A bill introduced by Congresswoman Katie Porter (CA-45) to increase consequences for companies that cheat investors today took the first step to becoming law, receiving the approval of the Financial Services Committee. Porter’s bill would scale up penalties for companies found by investor protection agencies like the Securities and Exchange Commission to have violated existing law.
“We can’t allow Wall Street executives to treat fines as just another routine cost of conducting business,” Congresswoman Porter said. “The current penalties scheme for companies who break the rules is simply outdated. Congress needs to take action to ensure that firms ripping off their investors receive more than just a slap on the wrist.”
The Stronger Enforcement of Civil Penalties Act would increase the maximum penalties that rule violators can be fined and adds a new, more severe category of penalties for repeated and egregious rule-breaking. Now that the bill has cleared committee, it awaits consideration by the full House of Representatives.
A companion bill was introduced on a bipartisan basis by Senators Jack Reed (D-RI), Chuck Grassley (R-IA), and Patrick Leahy (D-VT). The Stronger Enforcement of Civil Penalties Act has been endorsed by Americans for Financial Reform, the Consumer Federation of America, North American Securities Administrators Association, and Public Citizen.
A longtime commercial law professor and consumer protection advocate, Porter has made consumer protection a top priority in Congress. She stood up to leaders of both parties to speak up against a bill that would prevent the IRS from creating its own program to allow Americans to file their taxes for free. At a Financial Services Committee hearing earlier this year, she exposed Consumer Financial Protection Bureau Director Kathy Kraninger for her unfamiliarity with the basics of consumer lending. She called out Equifax CEO Mark Begor for arguing in federal court that his company’s data breach did not harm consumers.