SEC ENFORCEMENT SWEEPS: IMPLICATIONS FOR AGENCY AND INDUSTRY

Those who practice before the SEC have seen a continued rise in its use of sweep investigations, and there is every indication that this practice will continue. In this Article, we will first discuss the differing purposes between sweeps initiated by the Division of Examinations as compared with the Division of Enforcement. Next, we will examine the SEC’s recent use of enforcement sweeps, as well as the SEC leadership’s explanation of its purposes in conducting them. Then, we will analyze some typical characteristics of recent enforcement sweeps. Finally, we will consider the benefits and risks that the SEC’s increased reliance on sweeps presents for both the SEC and potential respondents.

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