The Dodd-Frank Act, the SEC, and Bureaucratic Oversight
Read the excerpt below about the Dodd-Frank Act and the role of the Securities and Exchange Commission (SEC). Use the information in the excerpt and your knowledge of U.S. Government and Politics to answer the following questions. Be sure to answer each part thoroughly and in your own words.
Source 1
The Dodd-Frank Act (2009) requires the SEC to adopt rules around public company disclosure of executive compensation. In 2024, the SEC fined 26 firms over $390 million for recordkeeping failures. But Dodd-Frank is far too complex, and becoming more so. At 848 pages, it is 23 times longer than Glass-Steagall, the reform that followed the Wall Street crash of 1929. Worse, every other page demands that regulators fill in further detail. Some of these clarifications are hundreds of pages long. Just one bit, the “Volker rule,” which aims to curb risky proprietary trading by banks, includes 383 questions that break down into 1,420 sub-questions. The Volcker Rule is enforced by a group of federal financial regulatory agencies, including the Federal Reserve Board, the Securities and Exchange Commission (SEC), and the Office of the Comptroller of the Currency (OCC).
The Economist, 2009.
Question 1
Describe the role of the Securities and Exchange Commission (SEC) in the context of the scenario.
Question 2
Explain why enforcement of the Volcker rule would fall under three different bureaucratic agencies.
Question 3
Explain two reasons why it is difficult for the president and Congress to control the bureaucracy.
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