On September 26, SEC Chair Mary Jo White gave an important speech to the Council of Institutional Investors in Chicago. The speech, entitled “Deploying the Full Enforcement Arsenal,” provides the first detailed roadmap to the Commission’s enforcement priorities in the White administration. While some of the SEC’s enforcement program going forward will involve a continuation and reinforcement of efforts begun during the administration of former Chair Mary Schapiro and former Enforcement Director Robert Khuzami, much of it will entail new initiatives. The bottom line is that — not surprisingly — Chair White, a former U.S. Attorney, is committed to a vigorous, prosecutorial-minded enforcement program.
Here are the key takeaways from the speech:
Individuals First. Perhaps most importantly, Chair White stated that the “core principle of any strong enforcement program is to pursue responsible individuals wherever possible.” Accordingly, she has “made it clear that the staff should look hard to see whether a case against individuals can be brought. I want to be sure we are looking first at the individual conduct and working out to the entity, rather than starting with the entity as a whole and working in.” She also indicated that the Commission is likely to seek more industry and officer-and-director bars against individuals. Chair White described this focus on individuals first as a “subtle” shift in approach, but it is one that, if followed in practice, will have significant consequences, particularly when paired with some of the other initiatives described below. READ MORE