Representative Spencer Bachus (R-AL), who chairs the House Financial Services Committee, is drafting legislation that would dismantle the SEC and strengthen its ethics practices.  Rep. Bachus has 3 main objectives:

• Consolidate SEC offices and divisions.
• Streamline and bolster ethics guidelines for SEC employees.
• Address conflicts of interest created by the high rate of SEC employees leaving the regulator for jobs on Wall Street.

Dubbed the "SEC Modernization Act," ...  this bill would eliminate OCIE - the SEC Office of Compliance, Inspections and Examinations - and merge its staff into the agency's trading, markets and investment management divisions. 

The bill also would eliminate the Division of Risk, Strategy and Financial Innovation, which was recently created to anticipate market problems. 

Part of the impetus for dismantling OCIE is the criticism it received after failing to detect Bernie Madoff's Ponzi scheme - notwithstanding the fact that the SEC has since modified its examination program.  Rep. Bachus also is basing some of the legistlation on recommendations from SEC Inspector General H. David Kotz as well as the GAO (Government Accountability Office).   [Reuters, 8/3/11]