JPMorgan Hearing: Market Regulators Warn They're Broke, Outgunned By Wall Street

Two of the most important financial regulators in the country have a message for Congress: We need more money.

At a hearing before the Senate Banking Committee Tuesday morning, Securities and Exchange Commission Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler told lawmakers that the demands on their agencies to expand oversight are growing, but that their pocketbooks are not.

"We’re way underfunded at the CFTC," Gensler told lawmakers, after a question on the subject from Senator Chuck Schumer (D- N.Y.). "Imagine if, all of a sudden, there are eight times the number of teams on the [football] field, but only seven refs," Gensler said. "There would be would be mayhem on the field. The fans would lose confidence."

Transport Canada, Energy Board told to clean up their acts

Transport Canada and the National Energy Board stand accused of multiple shortcomings in the transportation of dangerous substances in a new report from Canada’s environment commissioner.

Scott Vaughan found Transport Canada does not have a consistent approach to planning and implementing compliance activities, and the National Energy Board has yet to review emergency-procedure manuals for 39 per cent of regulated companies.

Both bodies have undertaken limited followup to correct deficiencies in their records, and must make improvements to reduce the risk and effects of accidents, Vaughan concluded in the year-end report released Tuesday.

“Good oversight of regulatory compliance is necessary to protect public safety and the environment,” he said.

Transport Canada is responsible for regulating the shipment of such dangerous products as industrial acids and petroleum by road, rail, air and ship; the National Energy Board regulates the flow of oil and gas through 71,000 kilometres of pipelines.

Ottawa thwarts drug controls, regulators say

Pharmacy regulators say their battle against the national epidemic of prescriptionnarcotic abuse is being needlessly thwarted by an unlikely obstacle: Health Canada and its refusal to hand over key wholesale drug data for privacy reasons.

The federal department oversees pharmaceutical manufacturers and wholesalers and requires them to regularly submit figures on their sales to pharmacies. Pharmacy regulators say they need that information to crosscheck the drugstores' own records, and help determine how large volumes of such drugs as OxyContin and Percocet are winding up on the street.

Health Canada says it cannot hand over the sales information for individual drugstores because of federal privacy legislation, an interpretation of the law some pharmacy bodies are questioning.

"It's an utter frustration," said Don Rowe, registrar of the Newfoundland & Labrador Pharmacy Board. "It's pretty frustrating when you can't get information from the national body that has that information. There's times where we wonder, 'Do they really care what's happening here?' "

Regulators say they do not want a confrontation with Health Canada, only increased co-operation to help curb what some experts call a prescription-drug-abuse "crisis." They raised the issue at a meeting between the regulators' national umbrella association and Health Canada in June.

Auditor slams watchdog’s lack of oversight

A provincial watchdog agency that oversees projects such as dams, mines and power plants is not doing enough to monitor and regulate projects it has approved, says a report by British Columbia Auditor-General John Doyle.

And along with shortfalls that include a lack of routine site inspections and vague wording of commitments that companies are supposed to keep, B.C.’s Environmental Assessment Office is falling down on its obligation to share information with the public, Mr. Doyle concluded.

“The audit found that the Environmental Assessment Office cannot assure British Columbians that mitigation efforts are having the intended effects because adequate monitoring is not occurring and follow-up evaluations are not being conducted,” Mr. Doyle said in his report, released Thursday. “We also found that information currently being provided to the public is not sufficient to ensure accountability.”

The EAO was created in 1995 with the mandate of ensuring that major projects meet environmental, economic and social sustainability goals.

Of 219 projects that have undergone or are currently undergoing an environmental assessment, 53 per cent have been approved and only one has been refused certification.

Mr. Doyle did not assess the process leading up to certification, but focused on follow-up and compliance, where he found shortcomings that include a lack of routine site inspections. Between 2000 and 2004, the EAO ran a pilot program to verify compliance at three projects.

The projects were found to be mostly in compliance, but issues of noncompliance were “identified and rectified when possible,” the report says.

Despite those positive results, the pilot program did not lead to a full-time system and “formal site inspections are not carried out regularly by the EAO.”

The report included six recommendations, including that the Environmental Assessment Office “ensure commitments are clearly written in a measurable and enforceable manner.”

B.C. Environment Minister Terry Lake on Thursday said the office has already started to make changes in how it tracks projects and that the government will implement all of Mr. Doyle’s recommendations by late 2011.

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Source: Globe & Mail