SEC to shift enforcement focus to individuals, White says

The new method: From the person to the firm rather than the firm to the person

Sep 26, 2013 @ 12:45 pm

Securities and Exchange Commission Chairman Mary Jo White said her agency will shift its focus to bring more cases against individuals who violate securities laws rather than the companies where they work.

“I want to be sure we are looking first at the individual conduct and working out to the entity, rather than starting with the entity as a whole and working in,” White, 65, said Thursday in a speech in Chicago. “It is a subtle shift, but one that could bring more individuals into enforcement cases.”

The SEC has faced criticism from lawmakers, judges and investors that many of its cases related to the 2008 credit crisis failed to punish high-ranking executives and allowed companies to resolve probes without admitting guilt. White, a former federal prosecutor and defense lawyer who became SEC chairman in April, has already begun seeking admissions of wrongdoing in cases against hedge-fund billionaire Philip Falcone and New York-based JPMorgan Chase & Co.

“Redress for wrongdoing must never be seen as a cost of doing business made good by cutting a corporate check,” White said in remarks prepared for a Council of Institutional Investors conference.

SEC investigators will also seek more mandatory compliance measures in settlements to prevent future misconduct and not just punish past wrongdoing, she said.

White also faces questions from lawmakers and investors about whether the SEC has a grasp on fragmented equity markets that are dominated by high-speed electronic trading and have experienced multiple technical failures in recent years.

The agency needs to be seen bringing cases that cover the “whole market,” White said. Investigators are planning cases in the coming year related to sophisticated trading strategies, dark pools and other trading platforms, she said.

(Bloomberg News)

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Vanderbilt's Distante: Storytelling and ESG Investing

Many investors and advisers want to make a difference with their investments. This means ESG investing is about telling the right stories to the right investors who want to make a difference. Vanderbilt's Stephen Distante, offers his perspective.

Video Spotlight

Help Clients Be Prepared, Not Surprised

Sponsored by Prudential

Recommended Video

Path to growth

Latest news & opinion

Brace for steepest rate hikes since 2006 in new year

Citigroup, JPMorgan Chase predict average interest rates across advanced economies will climb to at least 1 percent in 2018.

Why private equity wants a piece of the RIA market

Several factors, including consolidation in the independent advice industry and PE's own growing mountain of cash, are fueling the zeal to invest.

Finra bars former UBS rep for private securities transactions

Regulator says Kenneth Tyrrell engaged in undisclosed trades worth $13 million.

Stripped of fat commissions, nontraded REIT sales tank

The "income, diversify and interest rate" pitch was never the main draw for brokers.

Morgan Stanley fires former Congressman Harold Ford for misconduct

Allegations against the wirehouse's former managing director include sexual harassment, which Ford denies.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print