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SEC displaying aggressive new stance designed to scare off violators

Co-chief Ceresney reveals intention to considerably increase penalties to stop misconduct before it happens.

The Securities and Exchange Commission is taking an aggressive new stance against those that would violate its regulations, with the intention to considerably increase penalties to stop misconduct before it happens. 

SEC Co-Chief Andrew Ceresney took this position during a legal conference in New York, reports The Wall Street Journal. "Monetary penalties speak very loudly and in a language any potential defendant understands," Ceresney said.

The language is not surprising coming from the current SEC staff. The new leadership under Chair Mary Jo White has been vocal from its inception about the need for more stringent penalties. During her confirmation hearing in March of 2013, White campaigned on the promise to use “bold and unrelenting” enforcement on Wall Street. Ceresney’s words reinforce that stance.

The SEC policy that allowed companies to omit a statement of admission when charges are settled is one area that has already received focus.  The new SEC policy requires an admission of wrongdoing when a settlement is made. The new policy is intended to hold companies more accountable and has been used twice since its inception: once against Harbinger Capital Partners in August, and a second time in September against J.P. Morgan & Chase Co.

Among other tactics mentioned in the address were an increased willingness to fine individuals rather than whole corporations, and larger fines and sanctions when defendants decide to settle. Ceresney says he rejects the notion that increasing fines above historical levels will cause undo damage to stockholder and company reputation.

The co-chief alluded to additional regulations and rules currently in the workers, all with a higher goal of projecting a more engaged and aggressive SEC in the aftermath of the financial collapse.

The new rules will hopefully "help bring the swagger back to the enforcement division," Ceresney said.


Executive Editor

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Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

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