Chuck Schumer

It almost seems they had an attitude that they did not want to find things.

Look, I am not asking you how you have corrected it.

When I got to Congress in 1980, the SEC was one of the premier civil service organizations in the Government.

The pace of reforms is rapid, but it needs to keep that same pace going forward.

The SEC clearly needs more resources, but it is only one of two financial regulators that must go begging to Congress every year for appropriations.

I worry not only about the SEC's ability to catch the next swindler, but also about its ability to do its most basic job.

What do you think of the proposal, all three of you, that I made, which is that the SEC should be able to use the fees that it gets?

More complex products and less transparency equals a greater possibility of fraud and wrongdoing.

Again, you do not have to be Albert Einstein to figure out you ought to get some third-party verification and not accept the potential defrauder at their word.

It is just astounding. I mean, this was not just a mistake.

It was just sheer incompetence.

The bottom line is, while the SEC may need new laws and new tools, they had all the laws necessary on the books to catch Madoff.

If you could go lower, would you give them a lower grade than that?

The SEC apparently couldn't hit the broad side of a barn if you gave them a shotgun and directions.

Since the market crashed.

It depends who turns over.

Yes, but, OK, two points I would make. My time is up. But, number one, it would be done on a random basis and secretly, number one.

What we found out was that rating systems were filled with conflicts of interest.

I want to again publicly thank Jack Reed for his work.

Senator Shelby and I are determined to have this be a very inclusive process.

There are two areas... that deserve special recognition for the problems.

And, second, your proposal, of course, is not mandatory, and simply giving the information, if everyone is in the same boat--and just a few of them doing the same practice might prove to have the same discouraging effect of sort of paying…

I am proposing, in addition to Senator Reed's bill and the Administration's proposal, that for every ten rated products, the SEC would randomly assign a different rating agency.

We cannot overestimate the impact this had on the financial crisis.

It is clear the system as it exists is broken, and I want to look forward to working with Chairman Dodd, Senator Reed on his excellent proposal.