SEC’s Aguilar Concerned With Drop Off in Large Investigations, Lower Amount of Penalties

In his remarks before the 14th Annual Securities Litigation and Regulatory Practice Seminar, SEC Commissioner Luis A. Aguilar had some interesting “quality vs. quantity” comments with respect to the recently announced case and penalty statistics of the Enforcement Division. In short, he appears to wants more high-impact “large investigation” cases and greater penalties. He stated:

The SEC’s Enforcement Division has been generating a fair amount of press lately. Some of you may have seen the year-end statistics demonstrating that the Commission’s Enforcement staff brought the second-highest number of cases in the agency’s history. In the last few months, since my arrival at the SEC, the Enforcement Division also successfully negotiated agreements in principle to obtain $50 billion in immediate relief for investors in auction rate securities after these markets seized up.

While I applaud the tireless work of our staff, I do think the Commission can do more to fulfill its law enforcement role. I am particularly concerned by the potential drop off in large investigations, and by the dramatic decline in the past few years in the amount of penalties the Commission seeks and collects. In light of recent events, it is important now more than ever for the Commission’s enforcement staff to focus resources on cases involving the most egregious behavior with broad market effect and to be able to clearly send a message of deterrence.

He added that after three months as a Commissioner, the “one thing I have not been is bored.”

Read Commissioner Aguilar’s speech (via Securities Law Prof)