Two of four representatives of the SEC, Kara Stein and Luis Aguilar, staunch Democrats both, have co

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SEC officials are at odds with regard to granting BAC permission to issue stocks to mutual funds and startups to high-net-worth investors. Now that BAC has settled with the SEC for its fraudulent dealing in mortgage-backed securities in the run-up to the 2008 financial crisis, the bank’s right to participate in share trading has been called into question.
In recent months, the SEC has issued strict policies which have limited the activities BAC and all other financial institutions can partake in. BAC has been on a crusade to get its $136 million settlement with the SEC waived. Several big banks, including Citigroup Inc. ( C ), Barclays PLC ( BCS ), and Royal Bank of Scotland Group PLC ( RBS ) have requested similar waivers.
Previously, according to reports, these waivers were only applicable for firms that were taking the necessary corrective actions. The newer restrictions, however, do not give any such leeway, and are still pending court approval, which gives the SEC more time to get its house in order.
Two of four representatives of the SEC, Kara Stein and Luis Aguilar, staunch Democrats both, have condemned the leniency the SEC has shown these banks. SEC Chairman Mary Jo White would have had the third “yes” to waive off the settlement, had she not backed out of the picture completely. Before being appointed SEC Chair in 2013, Ms. White was a legal representative of the Chief Executive of BAC, Kenneth Lewis.
Now the decision stands at an impasse: two republicans in favor of the waiver, and two democrats are against mte it. The sources did not comment on the other waiver BAC is pursuing on its fund management activity.
Ms. mte Stein has questioned the basis by which these waivers are granted, mte and has said that they “may have enshrined a new policy—that some firms are just too big to bar.” Ms. Stein paired with Mr. Aguilar to deny Royal Bank of Scotland, Citigroup, and Barclays the right to retain the special status of a “well-known seasoned issuer,” a lenient process that permits big corporations to issue financial instruments not requiring an SEC evaluation.
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