SEC Restores Investigative Powers for Senior Enforcement Staff

WHAT HAPPENED?

On Feb. 9, 2021, the Acting Chair of the U.S. Securities and Exchange Commission, Allison Herren Lee, announced in a public statement that the regulator has granted investigative powers to the enforcement division. This action reinstates the division’s previously held authority, which was given to staff under former SEC Chair Mary Schapiro in 2009, and then removed by SEC leadership in 2017.

The increased authority of senior enforcement officials will speed up the investigative process and strengthen investor protection-focused policies by allowing staff to quickly halt fraudulent activity. Under the reinstated investigative powers, the enforcement division’s senior staff will be permitted to:

  • Issue a Formal Order of Investigation.
  • Subpoena documents as part of enforcement proceedings.
  • Take sworn testimony.

WHAT DOES THIS MEAN FOR ME?

The restoration of the enforcement division’s investigative powers is one of the first in a series of anticipated adjustments to SEC policy in the coming months. With changes in SEC leadership, including the upcoming Senate confirmation of future Chairman Gary Gensler, it is likely that updates to commission guidelines are already pending.

Fairview will continue to inform you of policy changes and how they may affect your firm’s operations. Our team of regulatory compliance experts is available to answer questions pertaining to the SEC’s policies and how you can improve your compliance program. Contact us today for more information about how Fairview can assist your firm.

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