Occupy Wall Street Group Offers Detailed Critique of Volcker Rule

By Dan Rivoli: Subscribe to Dan's

February 15, 2012 5:45 PM EST

Methods the Occupy Wall Street movement has used to push its message of economic fairness are familiar to most observers. There are the encampments, mic checks, rallies and protests outside of banks or Republican presidential campaign events.

But one group formed from the Occupy movement has taken a less-visible approach: submitting to the U.S. Securities and Exchange Commission a lengthy comment on the Volcker Rule, a key piece of the 2010 Dodd-Frank financial reform law that will ban banks from using their own money to make speculative bets, a practice known as proprietary trading.

Occupy the SEC Monday took advantage of the open public comment period typical in federal rule-making and submitted a 325-page letter outlining ways the finalized Volcker Rule can be a strong curb on the kind of proprietary trading that helped bring down the U.S. economy in 2008.
Though a rule's public comment period is a venue for industry stakeholders and trade groups, Occupy the SEC member Alexis Goldstein said in an interview the group's letter gives it a voice in the rule-making process "that's not the voice of the banks, not the voice of the financial lobby."

Occupying the Volcker Rule

Occupy the SEC started after Goldstein, whose Wall Street background includes Deutsche Bank and Merrill Lynch, held a teach-in during a general assembly -- a meeting of Occupy demonstrators and groups -- in New York. Goldstein met others interested in banking reform and policy, including attorney Akshat Tewary.

Well-versed in administrative law and securitization, Tewary knew the SEC was holding a public comment period on the Volcker Rule. A group of three then formed to discuss the rule in what they call a "book club" format.

"The subject matter for the Volcker Rule matched with what a lot of the Occupiers were trying to achieve," Tewary said in an interview. "Hopefully, it's going to turn banks away from the speculative activities they have been engaging in thus far."

Occupy the SEC members say the group had about a dozen or so members at its peak and currently has seven core members; Corley Miller, George Bailey, Caitlin Kline, Elizabeth Friedrich and Eric Taylor, along with Goldstein and Tewary, are listed in the group's SEC letter.

The group's magnum opus addressed in detail more than 300 questions the SEC put out as part of the public comment process, as well as including their own markup of the Volcker Rule as currently proposed.

"Like much of the 99%, we have bank deposits and retirement accounts that are in need of protection through vigorous enforcement of the Volcker Rule," the letter says. "Prohibiting banking entities from engaging in proprietary trading and banning their sponsorship of covered funds are key elements to regulating the financial system and giving force to the Dodd-Frank Act."

Some Strong Rhetoric

Occupy the SEC's letter certainly contains some strong rhetoric -- "the banking lobby exerted inordinate influence on Congress and succeeded in diluting the statute,

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