In a recent speech at the NYC Bar Association’s Third Annual White Collar Crime Institute, SEC Chair Mary Jo White outlined three key pressure points in the current enforcement environment. She described the challenges of the first pressure point – when multiple regulators are involved in the same or overlapping investigations. She noted that cases with more than two regulators are increasingly common. While understanding the inclination of regulators wanting to be involved in all cases touching on their jurisdictions, she encouraged regulators to coordinate with each separate agency making “a frank assessment of whether it brings the right expertise, jurisdictional authority, and appropriate remedies to the table.” She outlined benefits of parallel criminal and civil investigations, and discussed when such cases are most appropriate.
The second pressure point Chair White identified is the selection of individuals or entities as defendants. She refuted the common perception that the SEC is reluctant to charge individuals, noting that an internal staff analysis found that the agency charged individuals in 83% of its actions. However, she emphasized the need to hold corporations accountable as well. She stated that strong deterrence requires both avenues of accountability “because the law rightly places responsibility on the corporation for its employees’ wrongful conduct and it is often the corporate and compliance culture, or lack thereof, that fosters or fails to prevent wrongdoing.”
The range of remedies and ultimate resolutions was the final pressure point Chair White discussed. She stated that she has encouraged the SEC’s Enforcement Division to pursue bars from the industry that prevent wrongdoers from working in the industry or appearing before the SEC as a way to product the public from future harm. She also stated that the agency had recently had increased the agency’s focus on obtaining undertakings that would require the use of monitors or independent compliance consultants as another way to protect the public. Finally, she discussed the SEC’s implementation of a policy requiring admissions of wrongdoing in certain cases.