WASHINGTON — It could be "months" before the Securities and Exchange Commission brings new charges in the Wall Street insider trading probe due to the complexity of the cases and extensive defense tactics, the agency's chairman said Tuesday.
"We receive opposition from literally hundreds of lawyers in some of these cases," David Ruder testified before the Senate Banking Committee's Securities Subcommittee.
Though pressed by subcommittee chairman Donald Riegle, Ruder would not quantify the number of cases he expects to be brought.
Riegle, a Michigan Democrat, noted that the previous SEC chairman John Shad earlier had led the committee to believe that "a number of major cases" would be brought in 1987.
But Ruder declined to reiterate Shad's prediction, saying the number of cases would depend on the commission's evaluation. "I cannot quantify my response to the question," Ruder told Riegle.
Ruder later said he did not believe his statements on the status of the insider trading investigations were a retreat from the statement of his predecessor.
"I simply don't believe that I can state publicly where we are" in the probes, he told Reuters as he left the hearing room.
Ruder also cautioned the panel that Congress itself could harm the investigations if it fails to give the SEC sufficient funding.
Ruder said the SEC needs at least $142 million for the current fiscal year, but a spending bill that has passed both House and Senate would provide less than that.
Riegle said the committee would write the appropriate lawmakers urging higher funding levels but said their response would depend on a fuller SEC explanation of the status of the insider trading probes.
Ruder said he would make a public statement in a few days that would clarify the status of the investigations.
He also said the cases the commission was investigating were difficult to pin down due to the complexity of the alleged crimes and the extensive legal defenses.
"Insider trading is a natural outcome of human greed, and it is something which is very hard to find," Ruder said.
In addition to those cases centering on securities industry professionals, Ruder said the SEC was encountering many cases of what he called "the family connection."