SEC ‘Capacity Gap’ Risks Oversight Lapses as Regulator’s Targets Multiply

By Robert Schmidt and Jesse Hamilton

The U.S. Securities and Exchange Commission is about 400 employees short of what it needs to manage its current workload, according to a consultant’s four- month internal review mandated by the Dodd-Frank Act.

The preliminary findings by Boston Consulting Group Inc. reinforce arguments by SEC officials that the agency is underfunded and understaffed as it takes on oversight of derivatives, credit-rating firms and municipal bonds, according to a draft copy of the report obtained by Bloomberg News.

“Without sufficient human resources, the agency will be unable to complete the requirements of Dodd-Frank while maintaining its current activities,” the draft said.

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