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U.S.
President Barack Obama speaks about the economy and a payroll
tax cut
compromise during a visit to Osawatomie High School in Kansas
December 6, 2011. (Reuters/Kevin Lamarque)
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(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)
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