and cronkite's desire to be the best was very pronounced. >> douglas brinkley on his biography of longtime cbs news anchor, walter cronkite, tonight at 8:00 on c-span. >> our guest on newsmaker is the head of enforcement for the securities and exchange commission. .

>> i think our performance has been very strong. i last counted 102 entities and firms that have been charged and over 55 ceos, cfos, and senior corporate executive from conduct across the areas from issues companies like countrywide to new century to the firms that issued cdos with misleading statements such as saks,

wachovia, and they loaded their funds up with riskier assets than they disclosed to their investors. we've been active across the board. i understand those views by the public. we have a specialized unit set up to handle these indications. we're vigorous across the platform. some of the concerns sometimes is reflected in comments that why aren't more of the folks in jail? the sec does not have criminal authority. but we work closely with the justice department. i think our record is very strong. >> do you think you've hooked the biggest fish? or are the firms the biggest firm that is people have the most awareness of? are the people at the top just so good at interlating themselves from decisions in cases they do bring to we don't see the big executives getting charged? >> guest: you see in some of

the country wide and new century, we've charged ceos, cfos, senior corporate officers. in the invest maniment banks it's different because the cases that we charge was the issuance of a particular cdo that was misleading. that don't get vetted in the executive suite. some information does. when you are talking about a public company, earnings, reports, disclosures, and investors, those types of matters are signed off by ceos and cfos. cdo transactions and other deal-specific matters often aren't vetted at the senior corporate levels. don't get me wrong, we follow the trail of evidence wherever it leads, but the nature of the transactions is a little different. you are not going to see as many prosecutions of those folks for those types of violations as you might otherwise. but again we are look strongly and thoroughly across the entire

corporate network. >> host: andrew ackerman? >> you came three years ago, the failure to detect the ponzi scheme was the giant cloud. what point do you think the sec has recovered from that? >> i think the agency responded in exemplary fashion. as you would expect any entity public or private, we took a hard look at ourselves in terms of what we could do better. the result of that wassing the enforcement division in the most significant restructuring, created specialized units, flattening management, corporation programs to get earlier better evidence of wrongdoing, created a coo function to handle in a better

and more efficient matter of a lot of administrative and other tasks so the staff could spend more of their time. a lot of reforms. great deal of talent was available and came to the commission. they were repeated. from where i sit as indicated by the performance, the agency has responded extremely well. you know, done the things that it should do. which sometimes can be difficult to do. but do a gold hard assaysment of what we were doing good and what we were not doing good and making the changes. >> what were the types of cases that you are bringing now that you couldn't pre-crisis and madoff? >> as significant as madoff was, i don't want it to overshadow the commission has brought in year in and year out very many significant cases that have identified wrongdoing and brought people to justice.

i think what we've tried to focus on since the restructuring is the a greater emphasis on specialization to identify wrongdoing earlier in the cycle before the investor funds are gone and in areas that perhaps are not quite as transparent as they otherwise would. we're getting to them sooner. we're not waiting for the fund to blow up or the headline to appear. but we're in their earlier. in the asset management unit, we took a look across all investment advisors to see who were earning returns in excess of their competitors for certain strategies and who's returns for static over a period of time when you would expect to see volatility. they aren't indicative of wrongdoing, but that would be the kind of funding that you want to take a second and hard look at to determine a ponzi scheme or false evaluation. we're using more data to identify subsets of firms or individuals that we want to take

a closer look at. >> just to come back to the sort of impact madoff had. when you go up to the hill and ask for resources, does that continue to be a head wind in your request for additional resources? is it making your job harder is what you i want to ask? >> i don't think so. we haven't forgetten the lessons. i think there's enough of a track record of honest reform and proactive efforts that the honest critics will see that and don't use madoff as an example to deny funds. even for those persons troubled, the statistics make it clear we are under funded.

the chairman gave the comparison while we are responsible for regulating 35,000 entities, investment advisors, transfer agents, as well as in the enforcement division anybody that might commit security fraud, and we are about the size of the d.c. police force. that's one way of getting a measure of how our size and our budget compared to the task at hand. >> how has technology enhanced your effort? >> we've tried to do a lot to increase efficiency. we had an ant -- antiquated ediscovery system which collects all of the information that we get. just to give you some sense of the volume, i think we probably get anywhere from three to six terabytes of information a month. i think the entire library of

congress printed is 20 terabytes. we get massive data and we had an antiquated system that lacked search and artificial intelligence. we're not implementing that. we have new financial extract so we can now -- when you get massive numbers of broker dealer or banking records, you can quickly download that into spread sheets and data bases that could be manipulated where in the not too distance past it was being done manually. we are centralized some of our collections work where we sue people for the tines or distributions where we give out money to people who have been harmed. we are centralizing that so that investigators out in the field can spend a higher percent of their time in their competency which is investigating fraud and misconduct. i think the entire sec budget is -- excuse me, the entire sec

technology budget across the entire agency is about $100 million. of which enforcement gets a fraction. i know one firm that spend nearly $5 billion on technology and communication and equipment. that starts to give you a sense while we are doing what we can, greater technology budget would be welcome. >> why do you think lawmakers and procreators are reluctant to keep the sources that you need? >> i don't want to speculate on why some choose to support our request for additional funding and others do not. all i can say is i think the

funds are needed. i don't want to create the misimpression that we don't very consciously use what we have gotten, nor do we use the lack of funding as an excuse. we are an enforcement regulator with talent. we have advantages that those we investigate don't. as i recently testified before congress, we punch well above our weight class from my perspective. i like our chances in our cases. and there are some cases where look we're going to put whatever resources are necessary to see the case through to the end kind of regardless of some budget constrains. look, why some choose to support and others don't, i can't tell you. with dodd frank, that has only increased the burden on the agency. we were under funded in my view before dodd-frank, and dodd-frank has only increased

the workload. >> 15 minutes left. >> and you bring cases, particularly against large firms, in a lot of cases they are settled before they go to trial. they are usually settled with some payment of a fine. what evidence do you have that if those settlements deter wrongdoing. there have been pieces particularly among the wall street firm, they make settlements over seemingly without any additional penalty? >> first of all, we take into account the entire track record to decide what kind of penalties and sanctions to assess.

there's certain formulas based on the amount of the money that the firm earned of the success. that's why the chairman has actually questioned congress to grant additional authority. particularly in the case of firms that have violated a process in conjunction of the order to be able to allow us to assess greater penalties. we take that into account. from where i sit, the firm that goes with it, they study our cases, corrective action is taken. they look at their own shop and house and whether or not their have the same problem and try to correct it.

75% of our cases are filed and litigated. we are going to course and litigating against individuals and firms. we are only accepting settlements when we believe it is close to what it is that we could hope to get if we went to trial. we would be not doing our job and not protecting other investors if we didn't settle a case where we got close to what we hope to obtain and being able to get the money earlier. we could distribute the investors and use the same funds to go out and investigate the rest. >> the best is the 100, 150 pebble. that really is a few days if not a few hours worth of revenue. are you saying because we are legally restricted from assessing bigger fines or do you think bigger fines would be more

meaningful. >> we have statutory limits on what we can find. let's take golden sachs, for example. >> that's a sharp message they should be careful about the transactions they engage in and the fines and penalties they may face are not just a cost of doing business. there are cases where our penalty authority restricts our ability to obtain sanctions. to give you just a quick example, if an investment advisor earns and has $100 worth of assets, they earn 20%, they earn $20. if they engage in fraud and cause $100 worth of losses, the

most the sec can get is $20 in disgorgement because that's the amount they earned and another $20 in penalty. we can't get the $100 had back under the current law. that's another law that the chairman has asked under additional authority. >> they say in the policy we are in the weeds a little bit. it involves zombies. there's a front page story. >> you are talking about the funds. >> private equity zombie funds. yeah, there's a story in the "wall street journal" friday about how the sec is looking into the funds. someone quoted to that effect. can you explain how big of a problem you think this is? and if we should expect to see sec enforcement cases in that area? >> well, i don't comment on what we expect to see. it's a good example of what we're doing differently now. the asset management unit which is handling this, we hired a lot

of private sector management, risk managers, mutual fund operations to come into the commission and work with us both to help us investigate wrongdoing and also to tell us kind of where the rocks were and what was buried underneath them. this was one the initiatives where we identified the phenomenon which really is fund managers who are sitting on assets that can't be sold or their evaluations are so low that they really don't want to solve them. and so they are not particularly active, but the managers continuing to earn fees year in and year out so that the investors are paying and not seeing any return. we're going to take a close look at that and see whether or not there's a problem. also under dodd-frank now the advisors will be required to register if they have more than $150 million worth of assets in general. going forward one the benefits of dodd-frank is now our examiners can go into the advisors and look for things

like evaluation problems and zombie funds and things like that. >> so another issue tied to potential enforcement action involves around lehman brotherses. one the biggest bankruptcies ever. the agency spokesperson is on the record saying that you guys still have an open inquiry into the bankruptcy and the failure of that firm. there's apparently a memo. can you say if there's a reasonable prospect there will be a case in that area? >> it wouldn't be appropriate for me to comment except to say that the matter is still under consideration and analysis. we looked very closely at the examiners report. we conducted our own independent investigation including reviewing millions of pages of documents and dozen witness interviews and the matter remains under consideration. >> so the memo isn't the final

say in the matter? >> i'm not going to comment on a particular memo and what it said or didn't say. that's the current status of the case. >> you've brought a lot of inside trading cases recently. i think you beefed up that area, and it's been helped by technology. the very biggest cases though have been brought as criminal prosecutions by the u.s. attorneys office. how involved and where were you involved in those investigations and has -- have you in those been pushed to the background somewhat? or have you been critical in gathering the information and bring them to justice? >> look. we've brought parallel cases in every one of the insider trading cases that have been brought, including those brought up in new york arising out of the galon fund. we work with the authorities in

the criminal cases and provide a lot of analysis, document review, we do joint witness together, and we work closely with them. we have more resources and more expertise in the markets in general than the general authorities obviously have additional tools in their tool shed with respect to search warrants and wiretaps and the threat of jail as well. so together we take a very formidable force. we brought cases and parallel cases in every one the matters that the u.s. attorneys office in new york has done as well. it's a long standing partnership of both of the benefits to agencies. >> a lot of investigations, the justice department gathering information, but they are not allowed to share with you. does it work the same? do you gather information that

you are not allowed to share? >> there are restrictions on the grand jury and the restrictions on the wiretap information. those are probably the two areas you are talking about. but there are ways to construct an investigation with respect to the grand jury issues so that we can steer clear of those prohibitions. wiretap authority is more difficult. we can get wiretap information, we just can't get it on a timely bases. we can get it at some point down the road. there are ways to navigate around that. obviously the benefits of not -- the benefits of wiretaps is so great as you saw in the galon prosecutions that we want to make sure we don't do anything to disrupt or imperil the use. >> we have four minutes left. last questions. >> did dodd-frank regulatory overhaul gives you the guys the authority to give a lot of money potentially to people within

companies that blow the whistle on fraud, you know, at their companies. why haven't we seen any whistleblower awards? when will we? >> look the award are made only after the conclusion of a matter where there's been a determination that $1 million in sanctions have been ordered. because that's the threshold amount. so that just takes sometime for the cases to work their way through to the point where a final judgment has been approved and those kind of sanctions have been awarded. it's not secure vising or a cause for any concern that it hasn't happened yesterday. the whistleblower office is thriving and we're getting a substantial number of complaints and tips and referrals and more importantly i think higher quality ones which is exactly what we hope for. you know, the whistleblower

program along with our cooperation program where we offer reduce the sanctions for persons that come forward with evidence, those are more of the tools that we're trying to use to get information sooner about wrongdoing. >> there seems tonight perception on the republicans that the whistleblower program is undermining the internal compliance regime. that people are, you know, they want the money so they go straight to the sec. they don't bother go through the internal system at companies. what do you think of that? >> we heard -- i think we received over 600 comment letters. that was one the big concerns. we recognize that concern. because frankly, a strong internal come license department at a company can do a lot of good to prevent wrongdoing. we didn't want to disrupt that. we struck a balance in our rules where we included a couple of matters, including being able to take into account whether or not a whistleblower went first in house to their come license officer in deciding how much

they should be able to be awarded, you get more money, you don't lose your place in lines because there are certain deadlines. if you go in house first, you don't lose your place in lines in terms of eligibility. >> are you seeing more tips and whistleblowers that have gone through the internal process than not? >> the anecdotal evidence is -- and we believe this from the inception -- that people despite the financial incentive go to the company to try to correct the wrongdoing. it's only when they don't get the satisfaction that they think should be obtained do they come to the authorities. so i think a lot of concerns while legitimate have not been born out by the practice. >> any agency that you have to marshal your resources. if you had more as you asked, what sort of cases would you bring or what areas would you look at that you haven't been able to now? >> i think with more resources -- we would be able to do deeper

dives -- it's not so many new areas. because we cover the water front in terms of the types of violation. we have active offering frauds and foreign corrupt, and inside trading and accounting and disclosure. i think what we would do is we would have more people people being able to react sooner and construct investigations at an earlier stage so that we could stop fraud before the investor money is lost. that's probably the single biggest thing we'd do, as well as frankly we would have more paraprofessional and support help and it -- i.t. resources so we would be able to utilize the talent. >> we've heard you argue for additional regulation authority, better dollars and larger staff. if one thing could change to make the public safer, what would it be? >> from the enforcement perspective, i think it would be

larger budgets to be able to give us better technology and more support staff and more private sector experts. >> thanks for being with us. >> thank you. >> we are back with ed wyatt. after talking, the exchange commission is very bullish on the overhaul and the success rate of the sec and the postfinancial meltdown. what is the view of the financial oversight committees of the work that they are doing in the past couple of years? >> well, the certain people in congress have complained that, you know, that no matter how much money they give the sec, they still make monumental blunders. they did in the recent past with a real estate deal for a lot of office space that it turned out that they didn't need or couldn't fill.

continually, people bring up the madoff case, and say, you know, you missed that one. you missed the stanford case. why should we give you more money? >> stanford is the mini madoff, which is only $7 million ponzi scheme in texas. >> your thoughts when you talk to members of congress of what's happening. we heard from khuzami is asking for more dollars. what's their view? >> they need to be more important with the money they have. they are open to giving the agency more money, but they want broader structuring before they give them any more money. the sec is kind of the inusual position where they -- their funded by transaction fees that they impose on the firms that they oversee on wall street. and so giving them money doesn't necessarily translate to, you know, increase budget deficit. they are separate from the debate about increasing.

>> they are self-funding. >> they are essentially self-funded. but you still have reluctance to throw more money at regulators during this point. he kind of -- he didn't want to admit thatted missing maidoff -- madoff was overshadowing. that's their biggest concern. >> it's also talked about the bettering of their database and talked about the amount of money they spend, versus the large companies they are regulating and the resources on technology are apples and oranges. not only that, we've seen so many instances post 9/11 of the fbi. the government is slow in the technology area. how good of a job are they doing with implementing technology as a tool to find the bad guys? >> well, i think rob khuzami has recognized if you are going to keep up with all of the innovation in wall street, you

have to play their game and use technology to sift through the huge markets to try to find people who are doing insider trading patterns that are emerging that will lead you to clues. i think he understands that. and he's been very aggressive in doing it. they have brought more cases, they've brought bigger fines, and they've changed some structural things under mary shapiro where they don't need to go now to the full commission to get permission to start an investigation. so they are trying to do that. but look, drug lords have more money than the dea has. you know, criminal enterprises, the mafia had more money than the new york city police police department. it's always going to be that way. how well do they use what they have? >> dodd-frank, and other actions taken by washington, is the investing public better off and more secure now than it might have been four or five years ago?