SEC Admits Dragging Feet on Brokers’ Appeals : Securities: Increasing caseloads and a shortage of lawyers and support staff to process them are blamed for lengthy delays.

The Securities and Exchange Commission acknowledged Monday that brokers who violate securities laws have been allowed to continue working for years because of the SEC’s long delays in resolving appeals of disciplinary actions against brokers and securities firms.

In a lengthy report, an SEC task force headed by SEC Commissioner Mary L. Schapiro recommended that the commission limit the time it takes to rule on appeals to nine months. Appeals decided in 1992 had languished for an average of more than two years, and some much longer.

The appeals “were quite honestly just taking too long to be resolved by this agency,” Schapiro said. During the wait for the SEC to rule, “investors just weren’t being protected from people who were violating the law,” she said.

Disciplinary actions imposed by the stock exchanges and the National Assn. of Securities Dealers can be appealed to the SEC. The initial disciplinary investigations often take years. Once penalties are announced, brokers have discovered that they can delay their punishment for more than two years by appealing to the SEC. Punishment often includes suspension or being banned from the securities industry.

The commission also hears appeals of disciplinary cases decided by its own administrative law judges.

In 1992, the SEC had a backlog of 69 cases on appeal from the NASD and stock exchanges, up from 44 in 1991.

Schapiro said that in an effort to reduce the delays, staff already has been added to the SEC’s office of general counsel, which is in charge of processing the appeals. The task force’s report on “Fair and Efficient Administrative Proceedings” said that cases “sat idle for substantial periods” because of an increasing caseload and a shortage of lawyers and support personnel to process them.

The task force also recommended setting up a computerized system to keep track of appeals.

Lawyers who represent small investors have cited slow action by regulatory agencies, including the SEC, as one reason why brokers who repeatedly cheat clients have been able to hold on to their jobs for long periods.