The first half of 2017 was unusually quiet for the SEC’s Division of Enforcement. This undoubtedly stemmed from the change in administration following the November election. With Chair Mary Jo White and various other members of the agency’s senior leadership (including the Director of the Division of Enforcement) stepping down, and only two sitting Commissioners for much of the period, authorization of new cases slowed somewhat.
Pending the Senate’s confirmation of the new Chair in May, the SEC generally avoided novel or controversial matters. In contrast to recent years, there were no groundbreaking cases involving private investment funds (and, indeed, few investment adviser cases, period) or headline-generating sweeping enforcement initiatives. On the other hand, the trend towards a growing number of public company financial reporting cases continued unabated, though such cases remained on the smaller side. Insider trading cases likewise continued apace. But much of the action was in the realm of non-controversial retail fraud – Ponzi schemes, penny stock pump and dump schemes, and so forth.
However, by May the Commission was again firing on all cylinders—or at least most cylinders, as two of the five Commission seats remain vacant (for what is now going on two years). What remains to be seen is how much the new Chair and new Enforcement leadership team will reshape enforcement practices and priorities.
‘Enforcement 40’ for 2020
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