You are here:HomeNews CenterInsurance News2009Congress May Investigate Wall Street

Congress May Investigate Wall Street

Congress may create a 21st century version of a Roosevelt-era commission to investigate the causes of the financial crisis. Speaking to the Commonwealth Club of...
April 21, 2009

Congress may create a 21st century version of a Roosevelt-era commission to investigate the causes of the financial crisis. Speaking to the Commonwealth Club of California, House Speaker Nancy Pelosi (D-Calif.) said she told Treasury Secretary Timothy Geithner that she wants to initiate the equivalent of a Pecora Commission that investigated what happened on Wall Street to cause the economic collapse that led to the Great Depression in the 1930's.

Between 1932 and 1934, the subcommittee of the Senate Banking and Currency Commission investigated stock exchange practices and their effect on U.S. commerce, the national banking system, and the government securities market. The hearings also addressed issues of tax evasion and avoidance. The committee's work set the stage for the Banking Act of 1933, the Securities Act of 1933, and the Securities Exchange Act of 1934. The name comes from the chief counsel, Ferdinand Pecora, who was appointed by Herbert Hoover in 1929, but it was his work under Franklin Roosevelt that earned him fame. He personally questioned many of Wall Street's most influential figures of the day. He was credited with uncovering a variety of abuses of banks and their affiliates. Roosevelt later appointed him to head the Securities and Exchange Commission.

"We need to know," Pelosi said. "Some people can tell you one piece of it, others can tell you another…in order for us to make the right decisions as we go forward, we need to have a clearer understanding as to how we got here and what the exposure is to the taxpayer in all of this."

Pelosi Calls for Panel to Probe Wall Street (San Francisco Chronicle 4/16/09)