The U.S. Securities and Exchange Commission (SEC) is shifting its focus back to traditional enforcement cases under its new leadership, emphasizing individual accountability and protecting vulnerable investors. Sam Waldon, the agency’s acting enforcement director, highlighted this shift during a securities industry event on Monday.
Shift Away from Novel Enforcement Theories
In recent years, the SEC explored novel enforcement theories, including the groundbreaking 2021 “shadow trading” case, which resulted in a successful conviction. However, with Republicans taking control of the agency in January, the SEC has moved away from pursuing such innovative approaches.
“Creativity is probably not where we want to be,” Waldon stated, indicating a return to established enforcement priorities such as insider trading, accounting fraud, and cases involving disclosure violations.
Emphasis on Individual Accountability
Waldon stressed that cases focused on individual wrongdoing would take center stage. “It’s always a priority, but I do think that those are cases that are going to be received better by this commission,” he added. This signals a renewed focus on holding individual violators accountable for financial misconduct.
Focus on Retail Investor Fraud and Emerging Technologies
In addition to insider trading and disclosure fraud, the SEC will remain vigilant about protecting retail investors and addressing fraud involving emerging technologies. As technology-driven financial platforms expand, the agency is expected to monitor these developments closely.
Cryptocurrency Enforcement Eases
Since January, the SEC has softened its stance on cryptocurrency enforcement, pausing or dropping several high-profile cases against cryptocurrency firms. The agency also scaled back its enforcement staff’s ability to initiate formal investigations without obtaining commission approval. When questioned about the impact of this change, Waldon downplayed concerns. “It’s too early to tell,” he remarked, suggesting that formal approvals may still be granted through streamlined processes.
Paul Atkins to Testify Before Congress
Paul Atkins, appointed by former President Donald Trump to lead the SEC, is set to testify before Congress on Thursday. Industry experts anticipate that Atkins will advocate for policies that provide Wall Street with more regulatory relief.
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🔗 Source: U.S. Securities and Exchange Commission – Official Website
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