A shift has been underway in enforcement at the Securities and Exchange Commission since the inauguration of President Trump last month, according to a report by Reuters and Advisor Hub.
Sources speaking on condition of anonymity told Reuters that the SEC’s staff lawyers have been instructed to seek permission from the commission’s leadership before formally launching probes. This was reported as a “marked change in procedure that could slow down investigations.”
The enforcement staff will be able to informally investigate but will need approval for all formal orders of investigation, which are required to issue subpoenas for testimony or documents. It was not clear who ordered the new approach or whether it had been voted on by the SEC.
Under previous rules, SEC enforcement staff had broad discretion to open investigations, issue subpoenas, and demand documents without needing clearance from top officials.
A spokesperson for the SEC declined to comment to Reuters. The White House did not respond to a request for comment.
In December, Trump selected cryptocurrency advocate Paul Atkins, the CEO of Patomak Partners and a former SEC commissioner, to head the SEC. He called Atkins a “proven leader for common sense regulations.” In the years since leaving the SEC, Atkins has made the case against too much market regulation. Mark Uyeda is acting as the agency’s chair until Atkins is confirmed by the Senate
Former SEC Chair Gary Gensler stepped down when Trump took office.
The SEC usually has five commissioners, appointed by the president. Currently there are three, two Republicans and one Democrat.
The attorneys at Hyman Cotter PC were formerly senior attorneys in the SEC’s Division of Enforcement. We have represented clients in regulatory matters while working at Morgan Stanley and in private practice at some of the world’s largest law firms. Therefore, we understand the complexities that come with being the subject of a regulatory inquiry, and we have the experience to guide and advise you through any type of regulatory investigation. If you are the subject of a regulatory proceeding, contact Hyman Cotter PC at 312-291-4600 or through our online contact form for a free consultation.
