SEC’s Peirce Details ‘The Why Behind the No’ Votes on Enforcement

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By Andrew Ramonas

SEC Commissioner Hester Peirce defended her voting record May 11 after a news report detailed her proclivity for saying no when considering her agency’s enforcement actions.

The Republican in remarks prepared for a conference in Denver elaborated on her concerns about corporate penalties hurting investors, wasting the Securities and Exchange Commission’s limited enforcement resources, and setting new legal precedents through settlements.

The speech, titled “The Why behind the No,” expanded on various comments she previously shared with Bloomberg Law.

Bloomberg Law reported May 7 that Peirce registered at least some opposition to cases the agency’s Division of Enforcement recommended the SEC bring or settle in-house more often than her four fellow commissioners since she joined the commission in January, according to an analysis of SEC records. She regularly voted against Chairman Jay Clayton, an independent appointed by President Donald Trump, and Republican Commissioner Michael Piwowar when considering these matters before the right-leaning commission.

Enforcement, Peirce said in her speech, isn’t “an end goal” for the SEC, but rather “a last resort.”

“We cannot bring every case under the sun, but must focus on the cases that will actually make a difference,” she said in the remarks prepared for the 50th Annual Rocky Mountain Securities Conference. “This careful approach to enforcement is what we owe taxpayers, investors, and all of the participants in our capital markets.”

Peirce didn’t always dissent in votes. She fully backed more than 85 percent of the matters before her, including all rulemaking.

Cases involving Ponzi schemes, as well as offering, elder, affinity, and accounting frauds, are “straightforward,” Peirce said in her speech.

“The commission unanimously approves the vast majority of staff enforcement recommendations,” she said. “The bulk of our enforcement work is simply not controversial.”

To contact the reporter on this story: Andrew Ramonas in Washington at aramonas@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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