During a House Appropriations Committee hearing before the congressional recess, Rep. Sanford Bishop (D-GA) questioned SEC Commissioner Paul Atkins about protections against elder fraud.
00:00This is the gentleman from Georgia, Mr. Bishop, for five minutes of questions.
00:03Thank you very much, Mr. Chairman. Welcome, Chairman Atkins.
00:08Investor advocacy legal clinics assist predominantly elderly investors who've been wronged by their broker or their advisor,
00:18often involving their retirement savings.
00:21And those clinics also provide investor education and fraud awareness by meeting with investors in our local communities to advance financial literacy
00:36and ensure that the investors understand what their rights are.
00:41Unfortunately, today there are only 10 investor protection clinics across the country,
00:47and most of them are concentrated in the New York area.
00:51That's down from 24 clinics that were operating a decade ago.
00:57I understand this is because the funds that subsidize those clinics, for example, from FINRA and state regulators, have been exhausted.
01:06What can the SEC do to prevent or discourage the closure of additional clinics,
01:12and how are you promoting these and other resources to at-risk populations?
01:19Well, thank you, Congressman.
01:21That's very interesting in that it's down the road of what I really want to achieve while I'm chairman.
01:31Back in the mid-90s, I was a counselor to Arthur Leavitt, who was chairman of the SEC,
01:38and so he had me set up what we call the Consumer Advisory Committee, Consumer Investor Advisory Committee, I believe it was called.
01:47And then Arthur went out on the road to do town halls around the country for senior citizens and elsewhere.
01:55So I intend to rejuvenate that effort.
01:58I didn't realize that data that you just talked about, but I do intend to focus on senior fraud, on military folks.
02:10So when I was a commissioner, I went around the country as well to military bases and to universities and old folks homes and things like that to talk to people about these issues.
02:22So I think Arthur Leavitt had a great idea that he set up back then.
02:27It's kind of fallen away over the years, but I intend to rejuvenate that, and I'll look into these clinics that you've mentioned.
02:36With reductions in staff, that's going to make it a little bit challenging for you.
02:42So I was wondering how you were going to navigate the challenges.
02:47Well, I'll definitely look at that, and obviously you mentioned FINRA and other industry groups.
02:53I know SIFMA, the Securities Industry and Financial Markets Association, also sponsors things for schools, you know, the stock market game and things like that,
03:05to try to teach about investing and savings.
03:09So those are all issues that I think are very good.
03:12We have an investor advisory committee at the SEC, plus also an investor education committee, headed by Laurie Schock, whom I've known for decades.
03:22So I, you know, look forward to working with them on that.
03:25I've watched with interest, Mr. Chairman, the evolving landscape of cryptocurrency.
03:33I understand that you're interested in loosening the restrictions on crypto and the exchanges through the rulemaking process.
03:40What do you see as SEC's role in regulating cryptocurrency and what aspects of cryptocurrency do you think are the most important to address to cut down on the prevalence of fraud and what are effectively useless and valueless coins?
03:58Well, I'm sure you're concerned about fraud in any market, but, you know, we have a lot of fraud in the traditional financial markets as well,
04:08and I think in many respects, you know, on the digital asset side and the blockchain side, there's more transparency, frankly, than, for example, over cash and other sorts of things.
04:19So that's one important thing.
04:22Innovation is another that, you know, we need to foster.
04:26But the real rub right now is that there really are no rules that are tailored for this part of the market, which has grown and burgeoned.
04:37And if we don't have firm rules, that invites fraud because investors can't tell the wheat from the chaff as things go.
04:47So what I think we have to have is firm rules that give people direction and lanes to stay in and outlines our jurisdiction as well,
04:58and that then we can, you know, take action against fraudsters and others who are trying to scam people.
05:04So I share that concern, and I want to address it.
05:08My time has expired.
05:11Thank you, sir.
05:12The chair now recognizes the gentlewoman from Washington, Ms. Klusenkamp-Perez.
