Ted Kaufman - United States Senator for Delaware

Sen. Kaufman Recognizes Great Federal Employee, Erica Williams

October 8, 2009

   I rise again today to honor a great Federal employee, something I have been doing each week on the Senate floor. I do so because I believe it is very important to recognize the unsung heroes who work every day on behalf of the Nation with great effort and often with great sacrifice.

   Today, I want to honor an employee of the Securities and Exchange Commission, one of our most important independent Federal agencies, whose work affects all Americans. This great Nation was founded on a belief in freedom and fairness--two fundamental pillars of American society.

   This is what the Revolutionaries fought for in the time of Samuel Adams and George Washington. It is what the Framers enshrined during the era of Alexander Hamilton and Thomas Jefferson. Maintaining democratic government and fair, open markets were the charge of every administration and Congress from their day to ours.

   In the decades since World War II, American global leadership has focused on promoting these two concepts throughout the world. Democracy and Full Document: Congressional Record Full Texta fair marketplace complement each other perfectly. A society based on fair markets cultivates an egalitarian political culture. Likewise, democracy instills in all citizens the sense that they ought to enjoy in commerce what they so cherish in government: a marriage of liberty and equality.

   I have already spoken from this desk several times about the challenges we and the SEC jointly face today in protecting our financial markets. I have talked repeatedly about how, as a nation, our credit and equity capital markets are a crown jewel. Only a year ago we suffered a credit market debacle that led to devastating consequences for millions of Americans.

   I have squarely blamed the self-regulation philosophy of the SEC as being a major part of that problem. By this I mean that the SEC had too often deferred to those it regulates for knowledge, experience, and certitude. I feel so strongly about this because we have lived through an era where regulators and the leadership of regulatory agencies failed to regulate. Perhaps Congress, too, failed to give the regulators the tools and resources they needed to do their jobs effectively.

   These failures have contributed not only to a financial disaster but also to a loss of public confidence in our markets and our national economy. In addition, these failures run counter to our ideals of democracy and market fairness.

   During the time of the Revolution, we were a nation of farmers and merchants bound together by our common dependence on the trade of manufactured goods, foodstuffs, and local services. Today, we have become a nation of investors. Tens of millions of Americans own retirement accounts, and they depend on fair markets to protect those long-term holdings.

   Many Americans have suffered directly as a result of the markets losing value. Those who have not been hurt personally surely know someone--a parent, a friend, or a coworker--who has. The financial crisis has forced many to delay retirement or even go back to work. Most working Americans have lost something; some have lost almost everything.

   Under its previous leadership, the SEC lost its way. While the failure of the SEC to follow up on tips about the Bernie Madoff Ponzi scheme is certainly emblematic of this failure--and probably a huge blow to the morale of the agency--I believe morale at the agency may also have suffered for a much more fundamental reason. Too often in the past, the SEC leadership kept its employees from pursuing its core mission. This happened not only at the SEC but at other Federal agencies as well. There was simply a philosophical difference between their policies and the need for effective enforcement of regulations.

   Employees at the SEC, while still working hard every day, sadly, I suspect, have become somewhat demoralized by this and by resulting setbacks.

   And, I might add, SEC employees have also had to endure criticism of the Commission in recent months by concerned Members of Congress--myself chief among them.

   Today, the SEC stands at a crossroads.

   In the wake of last year's historic election, Washington has been focused on change. The greatest thing about change is that it offers the promise of a new start. I wholeheartedly believe one of the most fundamental qualities of the American people is the ability to pick ourselves up, dust ourselves off, and return to the important task before us.

   For the SEC, this means a renewed focus on its original mission: to maintain public faith in our markets, to protect all investors. The SEC needs to reassure our long-term investors--many of whom are average Americans saving for retirement--that the system is not rigged against them. I know the SEC can, and will, be a can-do agency once more.

   In 2005, the SEC moved into a new headquarters just a few blocks from the Capitol. It is a beautiful glass and stone building with a high, curving facade. The lobby is full of light, and its windows frame a view of the Capitol dome. Much of the building wraps around a courtyard, and in the center of that courtyard is a playground for the children who attend the SEC's employee daycare. Across the street are a school and a row of small businesses, including a busy coffee house. Behind the new building are the tracks leading out from Union Station carrying business travelers and commuters each day.

   The men and women who work in that building don't need to be reminded who they work for. They see them every day out of their windows. The stability and fairness of our financial markets affects every American, from the small business owner to the coffee house patron; from the daily commuter to the future of that toddler in daycare. I believe a new building provides a chance for a new beginning.

   I agree with the President that at least with regard to the financial crisis, the worst is behind us. Now is the time for the SEC to step to the plate. I know they can do it. I have faith in the SEC because it stabilized our markets in the aftermath of the Great Depression. I have faith in the SEC because it always proved to be resilient during times of institutional change, and I have faith in the SEC because it has some of the most talented public servants who are now working tirelessly to catch up after several years of failed leadership.

   One of those public servants is Erica Williams, a lawyer for the SEC's Enforcement Division. A graduate of the University of Virginia Law School, Erica has been with the SEC for 5 years. During that time, she has distinguished herself as a trial lawyer on several complex cases involving accounting and fraud. Before coming to the SEC, she worked at a major private sector law firm in Washington.

   In July, she and her team of SEC enforcement attorneys won a hard-fought verdict in Federal court on a case involving insider trading. This case, commonly referred to as SEC v. Nothern, was a rare case involving U.S. Treasury bonds.

   She could not have had better colleagues on this case than John Rossetti, Sarah Levine, and Martin Healy, all of whom equally deserve recognition. John is a graduate of Catholic University Law School, and he served for 9 years as an SEC enforcement attorney. Sarah, who holds a law degree from Yale, clerked for Justice David Souter before coming to 

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the SEC in 2007 as a trial attorney. Martin supported their efforts as a regional trial counsel at the SEC's office in Boston.

   Erica and her team had to prove that the defendant had insider knowledge from someone inside the Treasury Department. Approximately $3 million in illegal profits had been generated from this scheme. They argued their case strongly and thoroughly. They also had to prosecute the case with fewer resources than are usually available to private sector litigators. They worked weekends and sacrificed time with their families for long hours spent in the office or on the road. It all paid off, a victory that reflects what the SEC is all about: punishing and deterring wrongdoing.

   What Erica achieved with her team is more than a court victory, however. She is helping to send a message the SEC is back; that those who are contemplating fraud better think twice. That is why I am honoring her as my ``Great Federal Employee'' of the week.

   I know this is only the beginning. The SEC knows it needs to focus on deterring those activities that make our markets unfair. That is what Erica's victory and what other recent gains of the Commission have done. As new SEC Enforcement Division Director Robert Khuzami has said, the SEC is engaged in ``a rigorous self-assessment of how we do our job.'' Their victory is what Khuzami meant when he promised ``a focus on cases involving the great and most immediate harm and on cases that send an outside message of deterrence.''

   I also have faith in SEC Chairman Mary Schapiro, who shares my concern about the stability and the quality of our markets. She understands the trade-offs between market liquidity and market fairness, and she recognized how important it is to protect the interests of long-term investors.

   As my colleagues are aware, since March, Chairman Schapiro and I have exchanged communications, and I believe under her leadership the SEC is coming back stronger and better able to pursue its mission.

   The famous Alabama football coach, Paul ``Bear'' Bryant, once said:

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   I have learned over the years how to hold a team together. How to lift some up, how to calm others down, until finally they've got one heartbeat, together, a team.

   Chairman Schapiro believes in the SEC's mission, and she is working diligently to ensure that all who work there are doing so with one heartbeat--as a team. They, too, believe in the SEC's mission, and we have to make certain they get all the resources they need, not only to catch up but also to operate ahead of tomorrow's market threats.

   Taped to the door of Chairman Schapiro's office is a sign for all those entering with new proposals or ideas. It reads: ``How does it help investors?'' This ethos must once again be the source of inspiration for everyone who works in that beautiful new building.

   As the SEC embarks on its next chapter, I want all of its employees to know when they walk out of that lobby each day and see the Capitol dome, they should feel confident that those of us who work under it are their partners. We will be their partners by making certain the SEC is strong enough to do its job, and we will work together with the Commission to help identify and prevent new problems before they arise. The American people also should have patience and hope that the SEC is back and on the right track. We all hold a common stake in its success.

   The era of looking the other way is now behind us. The time has come to look forward. I hope my colleagues will join me not only in honoring the service of outstanding Federal employees of the SEC such as Erica Williams and her team but in recommitting ourselves to help them pursue our common goal. When it comes to protecting America's investors, we must have one heartbeat.

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