WASHINGTON - Rep. John Dingell, D-Mich., told federal regulators he may introduce legislation aimed at speeding up the disciplinary procedures used to try to get "truly bad apples" out of the securities business, including any municipal dealers.

"We intend to schedule oversight hearings on this issue and are considering necessary and appropriate amendments to the Securities Exchange Act of 1934," the chairman of the House Energy and Commerce Committee said in a Nov. 15 letter to Arthur Levitt Jr., chairman of the Securities and Exchange Commission and Charles A. Bowsher, comptroller general of the General Accounting office.

Dingell said his action was prompted by a five-part investigative series published by the Los Angeles Times in June 1992 that charged that there are serious shortcomings in the enforcement and disciplinary procedures of self-regulatory organizations like the National Association of Securities Dealers.

The Times article said that a number of Wall Street's biggest firms have knowingly kept on brokers with long records of cheating customers because they are big producers and the firms have had little incentive to weed them out.

"Nobody has the right to repeatedly cheat and steal and stay in this business," Dingell said in the letter, which he released copies of on Friday.

Dingell said he may seek an amendment to the 1934 securities law that would accomplish the equivalent of a "three strikes and you're out" policy to revoke the licenses of repeated violators. He said he is also considering tougher sanctions against firm officials who fail to supervise "rogue brokers."

Repeated offenses by brokers has been a problem in the municipal and government bond arenas. For instance, between 1977 and 1989 the NASD repeatedly slapped thousands of dollars in fines against Jim Swink Sr., a top official with Swink & Co. of Little Rock, Ark., which folded in December 1989.

Swink was sentenced this summer to 21 months in jail, and his son Jim Swink Jr. was sentenced to five months in a halfway house for a variety of securities violations involving trades in government and municipal bonds.

Dingell noted that the Los Angeles Times articles charge that disciplinary investigations by the NASD and stock exchanges are "shrouded in secrecy" and often take more than six years to complete. Meanwhile, brokers typically remain at their desks and go on to take advantage of many more customers, the article says.

Dingell said he understands that following publication of the series, the SEC sent letters of inquiry to nine securities firms requesting information on their hiring, retention, and supervision of brokers against whom there are multiple complaints or lawsuits by customers.

The chairman said he would give the GAO until February to complete the initial stage of its study and that the report be completed by June. And Dingell requested that the SEC submit a comprehensive report on its inquiry by June.

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