SEC head of enforcement discusses division’s ‘first of their kind’ actions

On Behalf of | Oct 19, 2021 | Regulatory Investigations

The director of the SEC’s Division of Enforcement detailed some of the actions his division has initiated recently to enhance trust in financial institutions, Think Advisor reports.

Gurbir Grewal spoke last Wednesday at the ‘SEC Speaks’ event held at the Practising Law Institute gathering. He said that the Enforcement Division has worked to “make clear that there is only one set of rules by prosecuting the bad actors who break them, without fear or favor.”

Grewal said he and his staff have increased the number of standalone enforcement actions taken during the last fiscal year, including cases involving auditor misconduct, insider trading, and bribery schemes. He also called for greater efficiency in the Wells process, in which the SEC Enforcement Division sends a notice to potential targets when an enforcement action against them is being planned.

In his remarks at the conference, Grewal noted that the division is taking proactive steps to police the financial industry by what he called a number of “first of their kind enforcement actions.”

The actions were as follows:

  • The first enforcement action involving securities using decentralized finance, or ‘DeFi’ technology, in which charges were brought against two Florida men and their Cayman Islands-based company.
  • Action against trading platforms that illegally facilitate or tout trading in crypto securities, resulting in a $10 million settlement by Poloniex LLC over charges of operating an unregistered online digital asset exchange.
  • Charges against an online crypto lending platform and its top U.S. promoter that were allegedly promoting a fraudulent $2 billion digital asset securities offering.
  • The first enforcement action involving Regulation Crowdfunding, in which the SEC brought charges over a fraudulent scheme to sell nearly $2 million in unregistered securities through two crowdfunding offerings.
  • The first enforcement action against an alternative data provider when App Annie and its co-founder and former CEO were charged with engaging in deceptive practices.

“I’m proud of the dedication of our team in Enforcement and believe that by both continuing these types of proactive enforcement efforts and sharpening our focus in additional areas, we will enhance Americans’ trust in our financial institutions,” said Grewal.

At Lewitas Hyman, our Chicago securities attorneys fully understand the regulatory scrutiny financial professionals and their firms face from the various regulators that oversee the financial services industry. If your firm is facing an investigation from a regulatory agency, please contact us at (312) 291-4600 or through our online contact form.

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