Securities and Exchange Commission Historical Society

In the Midst of Revolution: The SEC, 1973-1981

What the SEC Expects

Regulating Corporate Conduct

- 1974 Stanley Sporkin and Ray Garrett, Jr.

The disclosures that came out of the Watergate scandals reverberated across the political horizon for years. For the SEC, the most significant crimes of Watergate involved the use by corporations of bribes, kickbacks, and illegal campaign contributions. The SEC saw these crimes as a corporate disclosure issue; the shareholders had a right to know the nature of any and all payments that might subject the corporation to liability and thus the shareholders to some loss of stock value.

Under SEC Chairman Roderick Hills, the SEC exposed a plethora of questionable and illegal corporate payments. Stanley Sporkin, Director of the Division of Enforcement, testified before Senator William Proxmire's Joint Economic Committee that "the improper payments differed from company to company.. every day I put in, I find another wrinkle." (41) Senator Proxmire said the SEC's investigation showed that "an important part of the private sector (economy) was a house of marked cards, composed of kings of corruption, jacks of all illicit trades and aces of political influence."(42) Some inside the SEC, including Commissioner Sommer, called for a special duty of securities lawyers to the public, instead of exclusively to their clients.(43)

But a host of issues created difficulty for the proponents of a federal solution to the issue of corporate governance and accountability. Among state securities regulators and the securities bar, widespread disapproval about the proper role of the SEC in the regulation of corporate conduct made agreement difficult. Resistance to giving the SEC broad authority over that legal field, which long had been thought a state responsibility, slowed efforts at reform.

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Footnotes:

(41) Robert M. Smith, "S.E.C.'s Chief Grapples with Disclosure Rules, Among Many Problems," The New York Times, January 4 ,1976, p NES33; "30 Corporations Under S.E.C. Study," The New York Times, January 1, 1976, 1

(42) Ibid

(43) For two views of the duty of lawyers, see A. A. Sommer, Speech on Emerging Responsibilities of the Securities Lawyer, Fed. Sec. L. Rep (CCH), Paragraph 79,631; 83, 689 (1974); and contra, Monroe Freedman, A Civil Libertarian Looks at Securities Regulation, 35 Ohio State L. J. 280 (1974)


Related Museum Resources

Papers

September 27, 1973
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
October 11, 1973
document pdf (Courtesy of Harvey L. Pitt)
October 16, 1973
document pdf (Courtesy of Harvey L. Pitt)
January 24, 1974
transcript pdf (Courtesy of the Gerald R. Ford Library)
March 13, 1974
document pdf (Courtesy of Milton Cohen)
March 15, 1974
transcript pdf (Courtesy of Harvey L. Pitt)
March 20, 1974
image pdf (Government Records)
April 23, 1974
document pdf (Courtesy of Theodore Levine)
April 23, 1974
document pdf (Courtesy of Theodore Levine)
May 8, 1974
transcript pdf (Courtesy of Harvey L. Pitt)
May 21, 1974
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
May 30, 1974
transcript pdf (Courtesy of Harvey L. Pitt)
June 14, 1974
transcript pdf (Courtesy of Harvey L. Pitt)
June 17, 1974
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
July 4, 1974
transcript pdf (Courtesy of Harvey L. Pitt)
August 14, 1974
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
September 16, 1974
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
September 20, 1974
image pdf (Courtesy of the Gerald R. Ford Library)
October 3, 1974
transcript pdf (Courtesy of Harvey L. Pitt)
October 4, 1974
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
October 8, 1974
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
November 12, 1974
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
December 12, 1974
transcript pdf (Courtesy of Harvey L. Pitt)
January 16, 1975
transcript pdf (Courtesy of Harvey L. Pitt)
February 20, 1975
transcript pdf (Courtesy of Harvey L. Pitt)
March 14, 1975
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
April 11, 1975
transcript pdf (Arthur F. Burns Papers, Courtesy of the Gerald R. Ford Library)
April 14, 1975
image pdf (Government Records)
April 17, 1975
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
May 5, 1975
transcript pdf (Arthur F. Burns Papers, Courtesy of the Gerald R. Ford Library)
May 7, 1975
transcript pdf (Arthur F. Burns Papers, Courtesy of the Gerald R. Ford Library)
May 29, 1975
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
June 10, 1975
image pdf (Courtesy of the Gerald R. Ford Library)
June 13, 1975
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
June 24, 1975
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
July 16, 1975
transcript pdf (Courtesy of Harvey L. Pitt)
August 12, 1975
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
November 4, 1975
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
February 10, 1976
image pdf (Courtesy of the Gerald R. Ford Library)
February 16, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
February 17, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
February 20, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
February 23, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
February 24, 1976
transcript pdf (Courtesy of the Gerald R. Ford Library)
March 16, 1976
transcript pdf (Courtesy of the Gerald R. Ford Library)
March 17, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
March 18, 1976
transcript pdf (Courtesy of the Gerald R. Ford Library)
March 23, 1976
transcript pdf (Courtesy of the Gerald R. Ford Library)
March 31, 1976
transcript pdf (Courtesy of the Gerald R. Ford Library)
April 2, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
April 20, 1976
transcript pdf (Roderick Hills Papers, Courtesy of the Gerald R. Ford Library)
May 6, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
May 12, 1976
image pdf (Reproduced with permission from Securities Regulation and Law Report, Number 353 May 19, 1976, Special Supplement, p. 1-45. Copyright 1975 by The Bureau of National Affairs, Inc. 800-372-1033; http://www.bna.com)
May 13, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
May 21, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
June 7-8, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
June 16, 1976
transcript pdf (Roderick Hills Papers, Courtesy of the Gerald R. Ford Library)
June 29, 1976
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
July 1, 1976
image pdf (Roderick Hills Papers, Courtesy of the Gerald R. Ford Library)
September 16, 1976
image pdf (Roderick Hills Papers, Courtesy of the Gerald R. Ford Library)
January 7, 1977
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
September 15, 1977
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
November 3, 1977
image pdf (Courtesy of the Library of Congress)
December 8, 1977
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
May 8, 1978
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
August 8, 1978
image pdf (Government Records)
May 2, 1979
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
May 31, 1979
image pdf (Government Records)
June 28, 1979
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
August 14, 1979
transcript pdf (Courtesy of the estate of John R. Evans)
November 21, 1979
document pdf (Government Records)
August 5, 1980
image pdf (Government Records)
August 8, 1980
image pdf (Government Records)
November 24, 1980
document pdf (Courtesy of Mrs. Storrow Sommer)
January 23, 1981
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
February 4, 1981
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
April 24, 1981
transcript pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)

Photos

1974

Presentation of Distinguished Service Award

Oral Histories

05 March 2009

Hugh Makens

23 September 2003

Stanley Sporkin

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