SEC nominees back ending 'no admit no deny' settlements

Would-be commissioners say White's approach makes sense.
SEP 18, 2013
Two Securities and Exchange Commission hopefuls told lawmakers today that they support ending enforcement settlements that allow targets to avoid admitting or denying the charges. In a Senate Banking Committee hearing on their nominations, Kara Stein and Michael Piwowar said the SEC should be more flexible in its settlement model. Currently, the SEC allows parties to settle without admitting to the charges — a practice that has drawn criticism from judges as well as investor advocates. SEC Chairman Mary Jo White recently announced a push to change SEC policy and force financial firms to acknowledge guilt in some instances, saying that in cases in which investors were substantially harmed, the SEC would require “public accountability.” “The SEC should use all of the tools it has at its disposal,” Ms. Stein said today in response to a question from Sen. Elizabeth Warren, D-Mass. “Nothing should be on autopilot.” Mr. Piwowar emphasized that each enforcement action may require a different approach. “In some cases, they're appropriate,” Mr. Piwowar said of guilt admissions. “In some cases, they're not. They have to be dealt with on a case-by-case basis.” Ms. Stein and Mr. Piwowar were intimately familiar with their surroundings. Ms. Stein is an aide to Sen. Jack Reed, D-R.I., and has worked on the Senate Banking Committee for 15 years. She was staff director for the Subcommittee on Securities, Insurance and Investments when Mr. Reed chaired that panel, which deals with policies affecting investment advisers and brokers. Mr. Piwowar is the Republican chief economist on the Senate Banking Committee. He also has served as a visiting scholar and financial economist at the SEC. Sen. Mike Crapo, R-Idaho, ranking member of the committee, said that Mr. Piwowar “appreciates the value of economic analysis in SEC rule making.” Mr. Crapo and other Republicans have been pushing the SEC to conduct robust economic-impact studies before proposing regulations, including a potential rule that would establish a uniform fiduciary duty for retail investment advice. The nominees' Capitol Hill experience should help ensure their Senate confirmation. The committee is expected to vote as early as next month. If approved, they would then head to the Senate floor for a vote by the full chamber. Ms. Stein would replace Democratic SEC Commissioner Elisse Walter, while Mr. Piwowar would replace Republican commissioner Troy Paredes. The two SEC candidates were among five nominees for administration positions who appeared before the committee.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.