Now, similar to the early court battles for women’s rights, Occupy Wall Street has tossed aside its encampments and bullhorns and donned its legal garb and pro hac vices. Occupy Wall Street’s brain trust, Occupy the SEC, just filed a federal lawsuit that encapsulates the crony capitalist state that passes today for democracy.
The organization is suing every federal regulator that resides in the pocket of Wall Street – which means they are suing every federal regulator of Wall Street. And, spunky group that they are, they’re naming individuals too. Here’s the rundown: Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System, Martin Gruenberg, Chairman of the FDIC, Elisse Walter, Chair of the SEC, Gary Gensler, Chair of the Commodity Futures Trading Commission, Thomas Curry, Comptroller of the Office of the Comptroller of the Currency, Mary Miller, Under Secretary for Domestic Finance at the Treasury, Neal Wolin, Acting Secretary of the Treasury.
Occupy the SEC is serving a valiant public service in bringing this lawsuit. It explains to the court that one of the most critical components of the 2010 Dodd-Frank Act that was supposed to reform Wall Street has yet to be enacted by the regulators and this is in violation of law. The key component is the Volcker Rule, named after former Fed Chairman Paul Volcker, that would prohibit most forms of trading for the house on Wall Street, known officially as proprietary trading.
The lawsuit informs the court that Dodd-Frank required that regulators adopt rules relating to this section “within nine months after the completion of a study by FSOC [Financial Stabilization Oversight Council] relating to the Volcker Rule. The FSOC completed that study in January 2011.” The complaint proceeds to explain that the legislative language “is unequivocal in setting this mandatory deadline, which the Defendants and the agencies under their control have missed.”
Occupy the SEC (OSEC) has filed a lawsuit in the Eastern District of New York against six federal agencies, over those agencies’ delay in promulgating a Final Rulemaking in connection with the “Volcker Rule” (Section 619 of the Dodd-Frank Act of 2010).
Occupy the SEC blog
Occupy the SEC, an offshoot of the Occupy Wall Street movement that focuses on matters before government regulatory agencies, is suing the federal government in an attempt to speed up the process and get the Volcker Rule in place. The two plaintiffs in the case claim that their deposits are at risk, so long as banks are allowed to engage in risky gambling with federally backed funds:
Plaintiffs suffer the risk of irreparable injury to their deposits by reason of [the government’s] non-action. The Plaintiffs’ bank accounts are subject to potential dissipation or liquidation resulting from bank losses occasioned by excessively risky trading activities by those banks. The Volcker Rule would institute structural safeguards insulating depository accounts from banks’ proprietary trading activities, thereby protecting Plaintiffs’ bank accounts. Defendants’ unjustified delay in finalizing the Volcker Rule puts Plaintiffs’ bank accounts at continued risk of financial loss.
This is the first lawsuit challenging regulators to implement, rather than delay, the Volcker Rule. As Public Citizen’s Bart Naylor wrote, the suit is “making the straightforward case that banks shouldn’t gamble with savings because real people may be harmed.”
Currently, less than half of the rules in Dodd-Frank have been finalized. Wall Street, meanwhile, had its second most profitable year ever last year.