SEC Chair Mary Jo White continued to highlight the agency’s enforcement priorities programs during her speech at the Securities Enforcement Forum on October 9.
Chair White’s made clear her vision, saying the “goal of the SEC’s enforcement program is – and perceived to be – everywhere, pursuing all types of violations of our federal securities laws, big and small.” While admitting that the SEC’s resources are not unlimited, she emphasized that the strategy is to allocate the resources in such a way to make market participants understand that the SEC is looking and pursuing charges in all areas.
One strategy given particular emphasis in her remarks is for the SEC to focus on pursuing “deficient gatekeepers” - those who fail to do their jobs as gatekeepers in our financial system - including investment company boards. Chair White noted with approval the SEC’s charges against the independent directors of the Northern Lights Fund Trust earlier this year, saying that “Investment company boards serve as critical gatekeepers and we will focus on ensuring that they appropriately perform their duties.”
In response to criticism that such intense focus on gatekeepers may drive away those who would otherwise serve as directors, Chair White stated “first, being a director or in any similar role where you owe a fiduciary duty is not for the uninitiated or the faint of heart. And, second, we will not be looking to charge a gatekeeper that did her job by asking the hard questions, demanding answers, looking for the red flags and raising her hand.”
The full transcript of the speech is available here.