OSAWATOMIE, Kansas (Reuters) - President Barack Obama said on Tuesday he would call for legislation to strengthen penalties against Wall Street companies that break anti-fraud rules.
“Too often, we’ve seen Wall Street firms violating major anti-fraud laws because the penalties are too weak and there’s no price for being a repeat offender. No more,” Obama said during a speech in Kansas.
“I’ll be calling for legislation that makes those penalties count — so that firms don’t see punishment for breaking the law as just the price of doing business.”
Obama, who is running for re-election in 2012, made his remarks during a campaign-style speech laying out his pitch for a stronger middle class.
The Securities and Exchange Commission asked the U.S. Congress last week to expand its power to impose tougher financial penalties.
Penalties are limited to the amount of profits made from the corporate misconduct. SEC Chairwoman Mary Schapiro has asked lawmakers to lift that cap and allow the SEC to base fines on losses to investors, too.
She also is seeking to raise the limits on what the agency can charge for individual violations.
The agency can penalize individuals up to $150,000 per violation and up to $725,000 per entity. Under Schapiro’s proposed changes, those numbers would go up to $1 million and $10 million, respectively.
The SEC has been on the defensive about the size and content of its settlements.
A federal judge in New York last week rejected the agency’s proposed $285 million settlement with Citigroup over the sale of toxic mortgage debt during the financial crisis, and referred to the fine as “pocket change.” SEC officials have said they are limited by law on the penalties they can seek.
Reporting by Jeff Mason in Kansas and Aruna Viswanatha in Washington; Editing by Bill Trott