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SEC chair talks enforcement

  • Speech — gray Image

Sep 26, 2013

SEC Chair Mary Jo White gave a speech today at the Council of Institutional Investors fall conference in Chicago, Illinois. She touched on SEC priorities, but her speech focused on the Commission's enforcement principles, tools, and strategies.

As a well-respected attorney and former U.S. attorney for Manhattan, Ms. White admitted that enforcement is a topic she is passionate about. She praised the SEC's enforcement division, noting its large caseload and exceptional record. She stated that the goal of all SEC penalties is to have "teeth," meaning the penalties should be harsh yet fair, and send a strong message of deterrence. She also  advocates for penalty reform — allowing the SEC to seek greater penalties based on (1) three times the ill-gotten gains or (2) the amount of investor losses — whichever is larger, plus additional penalties for recidivism.

Ms. White also emphasized the importance of accountability in cases that demand more than just monetary penalties and compliance enhancements. She acknowledged the importance and use of no-admit-no-deny settlements, but explained certain scenarios that might require admissions:

  • Cases where a large number of investors have been harmed or the conduct was otherwise egregious.
  • Cases where the conduct posed a significant risk to the market or investors.
  • Cases where admissions would aid investors deciding whether to deal with a particular party in the future.
  • Cases where reciting unambiguous facts would send an important message to the market about a particular case.

Ms. White discussed the importance of pursuing individuals for wrongdoings in addition to companies. She said, "When people fear for their own reputations, careers or pocketbooks, they tend to stay in line." Ms. White also noted the importance of monitoring the whole market, having a presence "everywhere," and staying on top of the complex marketplace.

Please click for the full text of the speech on the SEC's Web site.

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