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[0] HEARING OF THE CAPITAL MARKETS, INSURANCE AND GOVERNMENT SPONSORED ENTERPRISES SUBCOMMITTEE OF THE HOUSE FINANCIAL SERVICES COMMITTEE SUBJECT: SEC OVERSIGHT: CURRENT STATE AND AGENDA CHAIRED BY: REPRESENTATIVE PAUL KANJORSKI (D-PA) WITNESS: MARY SCHAPIRO, CHAIRMAN, U.S. SECURITIES AND EXCHANGE COMMISSION LOCATION: 2128 RAYBURN HOUSE OFFICE BUILDING TIME: 10:00 A.M. EDT DATE: TUESDAY, JULY 14, 2009 (Part 5).

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Mr. Chairman, I want to thank you and the committee for your support of the SEC and I look forward to discussing with you our other activities, our thoughts for additional legislation, and the state of our resources and reform of the regulatory landscape. Thank you.

REP. KANJORSKI: Thank you very much, Madame Chairman. It sounds like you're off to a great start.

Part of the questioning I have I think I hear from many of my constituents, particularly after the most recent financial crisis in the country. They ask the question, why, after mistakes are made by people in various positions of government, particularly in the regulatory area of government, you never seem to hear of anyone being fired.

I don't want to suggest you have a wholesale firings, but what's your philosophy in terms of -- if there's a failure at the agency, not only from the past but on into the future, are you going to implement some sort of more stringent accountability to employees to do a good job so that they aren't necessarily lax in how they pursue enforcement or investigative.

I mean, I'll be honest with you. In the Madoff situation, I sympathize with the constituents of my friend from New York, Mr. Ackerman, that when you hear some of the stories that we heard in testimony of the inspector general, that only for the use of a single question, if somebody turned around when they were examining the Madoff, where are the securities, that would have resolved the problem, that there weren't any and therefore there was something fraudulent going on.

Yet nobody asked that question, and I think it's important enough to highlight so other people don't miss those questions in the future. So maybe if you could lay out your philosophy...

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