US securities regulator beefs up enforcement powers for new probes
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The U.S. Securities and Exchange Commission (SEC) plans to give new powers of enforcement to senior officers, giving them more authority to initiate investigations of breaches of security laws.
According to reports emerging in the Wall Street Journal, the regulator is beefing up the enforcement powers of its investigation teams, signaling a more robust approach to regulation during the Biden administration.
The SEC is going back to allowing more of its senior officers to authorize new enforcement probes, a sign of potentially more aggressive oversight during the Biden administration https://t.co/S2bEieGp0U via @WSJ
— Dave Michaels (@davidamichaels) February 9, 2021
The new powers will mean 36 senior officials have the authority to subpoena individuals and companies, compelling testimony and records to be submitted in evidence. The move reverses the position during the Trump administration, when these powers were removed from all but two senior officials.
The removal of the powers was designed to make decision making at the SEC more consistent, by reducing the scope of approval for new investigations. In restoring these powers, the securities regulator will now have scope to be more aggressive in its regulatory oversight.
SEC acting Chair Allison Herren Lee said the move would allow the SEC to better protect the interests of investors.
“Returning this authority to the division’s experienced senior officers, who have a proven track record of executing it prudently, helps to ensure that investigative staff can work effectively to protect investors.”
The new powers are set to reverse the trend under the Trump administration, which saw the number of new SEC investigations fall in every consecutive year, from 1063 in 2016 to 827 in 2019.
The rollout of the extended powers could see the regulator step up enforcement action against firms in breach of securities laws, including a number of firms who engaged in ICOs as a proxy for issuing securities.
Investigations are already underway into Ripple, with the SEC asserting that its XRP token is in fact a type of security. Under the new powers, similar enforcement action is likely to be brought against more companies and individuals operating without the approval of the regulator.
See also: CoinGeek Live panel, Regulation of Digital Assets & Digital Asset Businesses
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