The U.S. Securities and Exchange Commission seal hangs on the facade of its building in Washington, D.C.
The U.S. Securities and Exchange Commission seal hangs on the facade of its building in Washington, D.C. - 
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Steve Chiotakis: The Securities and Exchange Commission says stepped up enforcement efforts will continue. The SEC's gotten some good public marks for going after alleged impropriety at Goldman Sachs. But a lot of folks are poo-pooing the fact it failed to spot the accounting tricks at Lehman Brothers before that bank went under. Marketplace's Gregory Warner is with us live this morning to talk about it. Good morning, Gregory.

Gregory Warner: Good morning, Steve.

Chiotakis: How exactly is the SEC going to "grow new teeth," if you will?

Warner: Well the agency says it'll do a bunch of things. But first, its going to try to stop the practice of hiding debt. This is what got Lehman Brothers in trouble in 2008. They used accounting tricks to slide debt off the balance sheets just when it came time to release their quarterly report. Apparently, though, the art of hiding debt isn't limited to Lehman; lots of banks do some version of it. So Mary Schapiro, the chairwoman of the SEC, told the congressional panel the SEC sent a letter to 19 of the largest banks asking this question:

MARY SCHAPIRO: What has been their average debt balances over the period so that we don't just have them dress up the balance sheets for quarter end.

Chiotakis: All right Gregory, So let's say the banks answer that letter and say, all right you got us, we're dressing up our balance sheets. Then what?

Warner: Well the SEC says they'll make that information public, that's the first thing. Because that's what they're accused of with Lehman, of not letting the public know. So shareholders didn't really know what was going on inside Lehman until it was too late. The agency is also, though, considering new disclosure rules. So if a firm uses some transaction at the end of the quarter to reduce debt in a major way, they'd have to let people know. So investors would have a better sense of just how much debt a firm is carrying.

Chiotakis: All right, Marketplace's Gregory Warner reporting live for us. Gregory, thanks.

Warner: Thanks, Steve.

Follow Gregory Warner at @radiogrego