SEC Leader Change Didn’t Slow Enforcement Activity: Report

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By Andrew Ramonas

The SEC continued to bring cases at a brisk clip during its transition in leadership between the administrations of Presidents Barack Obama and Donald Trump, a new study shows.

Although the total number of Securities and Exchange Commission enforcement actions is down from the same period last year, tallies for broker-dealer, issuer reporting and disclosure, and securities offering case filings are up at least 20 percent, according to an April 20 Cornerstone Research report. The consulting firm compared data between the first halves of fiscal years 2017 (Oct. 1, 2016, to March 31, 2017) and 2016 (Oct. 1, 2015, to March 31, 2016).

The overall 10 percent decrease from 372 to 334 filings mostly was due to fewer actions against delinquent filers, the analysis said. Removing those matters from the total leaves 299 actions, nearly the same as in the first half of FY 2016.

While the amount of activity is on par with tallies that reached record highs in each of the past three fiscal years, the number of enforcement actions might decrease in the coming months, Cornerstone Research principal Sara Gilley told Bloomberg BNA.

“There is the possibility with the changes at the SEC there could be a shift in enforcement priorities and enforcement activities as early as late fiscal year 2017 or early fiscal year 2018,” she said in a phone conversation.

Enforcement Changes

The six months of statistics cover almost four months at the SEC under former chairman and Obama appointee Mary Jo White, who resigned Jan. 20 following a flurry of enforcement activity in her last few weeks at the agency. Republican Michael Piwowar became the commission’s interim leader after her departure. Jay Clayton, Trump’s nominee to head the SEC, is awaiting Senate confirmation.

The SEC this year already has taken steps that rein in the agency’s enforcement lawyers as it faces possible budget cuts under Trump and prepares for a new leader.

The commission removed dozens of contractors who helped with investigations, while the Enforcement Division is operating under a hiring freeze, Bloomberg News reported. Piwowar also limited senior enforcement lawyers’ power to authorize formal investigations, requiring the division’s chief to sign off on any subpoenas.

‘Full Speed Ahead’

Christopher Davies, vice chairman of Wilmer Cutler Pickering Hale and Dorr LLP’s Securities Department, told Bloomberg BNA he doesn’t expect a dramatic shift in enforcement activity this year, even if a Trump-era SEC doesn’t bring a record number of cases.

“There might be some dialing back, but I don’t think it will be profound,” Davies said.

Acting Enforcement Director Stephanie Avakian told Bloomberg BNA her staff is not pulling back on its work.

“We’re out there full speed ahead,” she said in an interview during a privacy summit in Washington.

To contact the reporter on this story: Andrew Ramonas in Washington at

To contact the editor responsible for this story: Phyllis Diamond at

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