The Securities and Exchange Commission’s (SEC) Division of Enforcement (Division) took center stage during a recent House hearing examining its mission, operation, and current initiatives.
The Subcommittee on Capital Markets, Securities, and Investments also observed how the Division’s agenda is consistent with the SEC’s Congressionally-mandated, three-part mission to protect investors, maintain fair, orderly, and efficient markets and to facilitate capital formation.
The hearing presented critical takeaways for the SEC’s Division, which included that priorities should be grounded in protecting investors and deterring wrongdoing and the effectiveness of the SEC’s enforcement program should not be evaluated solely based on how many headlines it can generate or the number of actions brought against it. Also, when considering penalties, the SEC must consider innocent shareholders and strike the right balance between deterring wrongdoing and protecting shareholders.
“We should not evaluate the true effectiveness of a regulatory agency or its enforcement program solely based on how many headlines it can generate,” Subcommittee Chairman Bill Huizenga (R-MI), said. “The SEC should continue to refocus its enforcement priorities on the core principles it has identified, especially those that strengthen protections for Main Street investors and increase accountability.”
Stephanie Avakian and Steven Peiken serve as Co-Directors of the SEC’s Division of Enforcement.
“Vigorous enforcement efforts across our markets that are aimed at protecting Main Street investors have been—and will remain—a priority for the Enforcement Division,” the co-directors said. “And as we enhance our focus on protecting retail investors, we will continue to actively pursue cases against large corporations, financial institutions, and other market participants who violate our federal securities laws.”