Former SEC head: Lawmakers tried to make us “look stupid or inept or venal”

A former Securities and Exchange Commission chair described to the Congressional Financial Inquiry Commission the full-court press that industry lobbyists, working with sympathetic lawmakers, exerted on his agency when they learned of a new proposed regulation they didn't like.

From the report:

Former Securities and Exchange Commission chairman Arthur Levitt told the FCIC that once word of a proposed regulation got out, industry lobbyists would rush to complain to members of the congressional committee with jurisdiction over the financial activity at issue. According to Levitt, these members would then "harass" the SEC with frequent letters demanding answers to complex questions and appearances of officials before Congress. These requests consumed much of the agency's time and discouraged it from making regulations. Levitt described it as "kind of a blood sport to make the particular agency look stupid or inept or venal."

Levitt chaired the SEC from 1993 to 2001.

The CFIC report found that a lack of regulation by the SEC and other government agencies was a key cause of the crisis.