This has been the week of scandals.  With political forces, lobbyist and lots of deep pockets, our government is a breeding ground for scandals.  The SEC has certainly not been immune.  A few years ago, the SEC made headlines because several of its employees were watching pornography during working hours.  Recently, the former chief inspector in the Inspector General’s office filed a whistleblower lawsuit alleging he was terminated because he raised concerns over two senior officials sleeping together.  The whistleblower also alleged that several officials handed out SEC contracts to friends at influential consulting firms. 

While nothing can eliminate scandals completely, an article on argues that the SEC could fund itself, rather than seek yearly Congressional appropriations.  According to the article, the settlements, penalties and fines collected by the SEC has exceeded its budget in recent times.  For example, between 2005 and 2009, the SEC collected $7.4 billion in transaction and registration fees, while Congress appropriated just $4.5 billion to the agency during that period. 

Changing the nature of the SEC’s funding could certainly insulate it from political pressures of Congress and deep pocketed regulated entities.  It would also insulate the SEC from attempts by some in Congress to defund regulatory agencies, or from budget cuts, like sequestration.  While changing the way the SEC is funded may not prevent sex scandals, it is certainly worth considering for an agency that regulates many entities that are politically connected and active.