Federal securities regulators are zeroing in on investment advisers and brokers' minor infractions, but they won't say which ones.
“It could be the range of our rules, frankly,” said Mary Jo White, chairman of the Securities and Exchange Commission, speaking to reporters after a speech in Manhattan on Friday. “I don't want to name particular ones.”
Ms. White last week announced that the SEC increasingly will make minor infractions the subject of enforcement cases.
“Every rule is important,” she told
InvestmentNews. “But what you're looking for are the ones that most impact investors.”
(See also: SEC: Small violations can spur enforcement)
Compliance consultant Amy Lynch said the SEC increasingly is going to build cases that amount to an “easy enforcement action.”
“This is a strong focus for the SEC,” said Ms. Lynch, president of FrontLine Compliance LLC. “They're going after the smaller violations because they're going to address anything that's an easy score.”
Compliance consultant Nancy Lininger said the SEC is most likely to focus its efforts on big issues such as fraud and failure to supervise.
“The reality is that the SEC is focusing on the big rule breakers, and they're not getting around to auditing the average IA or broker-dealer,” said Ms. Lininger, founder of The Consortium.
Ms. White also responded to concerns raised last month by two leading House Republicans that the SEC's new focus on regulating private-investment funds could diminish its oversight of registered investment advisers. Under the Dodd-Frank financial reform law, the SEC has taken on about 1,500 additional advisers to private-equity and hedge funds.
“Perhaps what the point is, it's that we need more resources,” she said. “And we do need more resources in order to get sufficient coverage of IAs, whether they're to private funds or to retail investors, and obviously, we're very concerned about making sure that we're protecting those retail investors as we also examine the private-fund advisers.”
Ms. White was in New York to speak to a private-funds industry trade group, the Managed Funds Association.
