Senators and witnesses at a hearing Tuesday debated whether Dodd-Frank is helping or hurting investors as the law approaches its first year since passage.
Sen. Tim Johnson, D-S.D., chairman of the Senate Banking, Housing and Urban Affairs Committee. pledged to oversee the act's forthcoming rules for investor protection, including corporate governance provisions and whistle-blower incentives, but ranking member Sen. Richard Shelby, R-Ala., warned that those same changes “threaten to harm investors” by “saddling them” with new rules and giving more leverage to special interests.
In separate testimony, Anne Simpson, senior portfolio manager of global equities for the $241.3 billion California Public Employees' Retirement System, Sacramento, agreed that new Dodd-Frank provisions like corporate governance reform would provide investors “with better tools, including better information, to hold directors more accountable.”
However, Harvey Pitt, former SEC chairman and general counsel, said Dodd-Frank was “a missed opportunity to fix what was clearly broken. We've saddled regulators with a more cumbersome regulatory system. I am deeply concerned that Dodd-Frank set up everybody for failure.”
When it comes to new oversight of hedge funds and private equity firms, for example, “the SEC cannot possibly fulfill” its added duties, Mr. Pitt said.