Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

In a recent speech, SEC Chair Mary Jo White spoke to the types of cases where admissions of wrongdoing might be appropriate.  According to Chair White, candidates potentially requiring admissions include:

  • 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.

As to enforcement priorities, Chair White noted the SEC has limited resources and needs more to do a more effective job policing markets and protecting investors.  But the SEC  needs to have a presence everywhere and be perceived to be everywhere bringing enforcement actions against violators in every market participant category and in every market strata. Chair White named the following areas:

  •  Protecting investors from misconduct by investment advisers at hedge funds, private equity funds, and mutual funds.
  •  Financial statement and accounting fraud.
  •   Insider trading cases. 
  •   Fraud in connection with microcap securities where abuses have unfortunately increased with the use of social media.

Chair White also noted the SEC also must be prepared to bring actions in the new markets and regulatory regimes that follow from the new rules mandated by the Dodd-Frank and JOBS Acts.

Check frequently for updated information on the JOBS Act, the Dodd-Frank Act and other important securities law matters.