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February 25, 2021

SEC Takes Meaningful First Step to Punish, Deter Lawbreakers

SEC Takes Meaningful First Step to Punish, Deter Lawbreakers
Better Markets applauded the SEC for redelegating authority to its enforcement staff so they can act more swiftly to detect and stop ongoing frauds, preserve assets and protect investors.
Why it matters: Providing broader investigative authority to the SEC’s enforcement staff is critical to identifying, investigating, stopping and punishing fraud and lawbreaking. Money moves at the speed of a keystroke, and the SEC must move equally fast to protect investors and markets and redelegating this authority will allow it to do that.
What we said: For too long, the SEC has been AWOL on meaningfully and effectively punishing and deterring lawbreakers, many of whom are repeat offenders because the so-called sanctions are so minimal as detailed in a recent Better Markets’ Report
That is not only due to frequent sweetheart settlements, but also because the SEC has unilaterally disarmed itself from using all of the tools in its arsenal against those lawbreakers. One example is the SEC’s policy under the Trump administration to provide virtually automatic waivers to automatic disqualifications. The SEC reversed the policy earlier this month. Another was the limit placed on who could open investigations and issue subpoenas in a securities investigation.
Bottom line: Investigative authority, without prior Commission approval, should never have been taken away from the professional staff. Restoring this is a first step in reviving a robust enforcement policy at the SEC, which must also not automatically waive critically important statutory disqualifications.
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