SEC Chairman Mary Schapiro delivered a speech this morning at PLI”s 2009 “SEC Speaks” conference that announced several important new Enforcement Division initiatives.

First, Schapiro stated that as a “first, but significant,” step in empowering the Enforcement staff,

I am this week taking action to end the Commission’s two-year “penalty pilot” experiment, which had required the Enforcement staff to obtain a special set of approvals from the Commission in cases involving civil monetary penalties for public companies as punishment for securities fraud.

In speaking to our Enforcement staff, I’ve been told that these special procedures have introduced significant delays into the process of bringing a corporate penalty case; discouraged staff from arguing for a penalty in a case that might deserve a penalty; and sometimes resulted in reductions in the size of penalties imposed.

Second, she stated, she was immediately implementing a system permitting more rapid approval of formal orders of investigation - “the permission slips given out by the Commission that allow SEC staff to use the power of subpoenas to compel witness testimony and the production of documents.” Schapiro stated that

When I was a Commissioner, formal orders were routinely reviewed and approved within a couple of days by written approval of the Commission or by “duty officer” - a single Commissioner acting promptly and on behalf of the entire Commission.

Today, however, many formal orders of investigation are made subject to full review at a meeting of all five Commissioners, necessitating that they be placed on the calendar sometimes weeks in advance.  In investigations that require use of subpoena power, time is always of the essence, and every additional day of delay can be costly. To ensure that subpoena power is available to SEC staff when needed, I’ve given direction for the agency to return to the prior policy of timely approval of formal orders by seriatim approval or where appropriate, by a single Commissioner acting as duty officer.

Schapiro added that she has spent much of her first week and a half at the SEC meeting with senior staff to determine other ways to help reinvigorate the SEC’s enforcement program, including improving the handling of tips and whistleblower complaints and focusing on areas where investors are most at risk.  She said she anticipates further improvements will be rolled out in the coming weeks and months to expedite and empower the Enforcement Division.

Read Chairman Schapiro’s speech