SEC Enforcement Update - The SEC Speaks in 2013


The U.S. Securities and Exchange Commission held its annual SEC Speaks program in Washington, D.C. on February 22-23, 2013. In the postfinancial crisis, post-Dodd-Frank world, it is clear that the Commission and its staff are attempting to move forward from the tumultuous events of the last several years, which have reshaped not only the financial landscape regulated by the Commission but also some of the basic tools used by the staff to conduct its business. George Canellos, Acting Director of the Division of Enforcement, told the assembled audience that the staff was moving into an era in which the financial markets are rebuilding and recovering, and that the SEC was focusing its resources on ensuring that the recovery was built on a foundation of compliance.

“Creative” Thinking on Remedies and Process; Encouraging Cooperation -

Canellos expressed his view that the SEC should be making more “creative use” of the range of enforcement remedies available to the agency rather than following its historical “one size fits all” approach. For example, hementioned that the SEC has recently been seeking more specific “conduct based” injunctions in addition to, or in lieu of, the kind of sweeping “obey the-law” injunctions that have been the hallmark of SEC enforcement for decades (and that have faced occasional but increasing scrutiny from federal judges). Canellos also suggested that the SEC was likely to make more frequent use of its new statutory power to impose monetary penalties in administrative cease-and-desist proceedings, an option now available to the SEC under Section 929P of the Dodd-Frank Wall Street Reform and Consumer Protection Act. He also hinted that the Commission might make greater use of so-called Section 21(a) reports, in which the Commission publicly articulates its views about a case after an investigation is completed, sometimes in tandem with the filing of an enforcement action but often instead of filing formal charges.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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