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SEC Continues Aggressive Enforcement Policy

October 22, 2013

The U.S. Securities and Exchange Commission (SEC) recently announced that it would be seeking higher monetary penalties to deter would-be violators. This announcement comes just a few months after SEC Chairman Mary Jo White’s statement that the SEC may require civil defendants to admit liability as a condition of resolving securities-related charges in certain cases. The SEC’s prior policy permitted parties to settle SEC enforcement actions without admissions of wrongdoing. These new measures underscore the SEC’s commitment to continuing its aggressive enforcement policies.

On October 1, 2013, the co-director of the SEC’s Division of Enforcement, Andrew Ceresney, reiterated that the SEC will press for admissions of wrongdoing in cases involving a large number of investors or where the misconduct presented significant risks. Through this policy, the SEC seeks to provide clear information to assist investors and also to send a strong message to the market. Chairman White has announced that the SEC will not limit its enforcement to the “biggest fraud” but will strive to protect investors from “unscrupulous advisers and brokers, whatever their size and the size of the violation.”

Legislation pending in Congress would grant the SEC power to impose monetary penalties of three times either the ill-gotten gains to the perpetrator or the investor losses, whichever is greater. While the SEC has increased monetary sanctions over the past decade, Ceresney says this request reflects the increase in the size of the biggest companies and their earnings. Along with requiring admissions of liability, Ceresney believes that the SEC should consider policies such as requiring violators to implement measures to protect against future violations.

To learn more about the SEC and its continuing efforts to ramp up enforcement activities, contact the author of this alert, Jonathan Feld at 312-627-5680, or any of the Dykema attorneys listed to the left.


As part of our service to you, we regularly compile short reports on new and interesting developments in our business services program. Please recognize that these reports do not constitute legal advice and that we do not attempt t cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments on this newsletter, or any Dykema publication, are always welcome. © 2013 Dykema Gossett PLLC.

As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2018 Dykema Gossett PLLC.