Throughout the week over at Securities Docket I highlight the most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation. Here is a digest of my picks for the week ending April 6.
An “Entrepreneurial” and Restructured SEC Pledges Proactive Enforcement
Jonathan Polkes, Christian Bartholomew and Sarah Nilson, The Harvard Law School Forum on Corporate Governance and Financial Regulation
At the recent “SEC Speaks” conference in Washington, DC this year, Chairman Mary Schapiro and senior Enforcement officials vowed to increase investor protection through use of the SEC's expanded authority under the Dodd-Frank Act and initiatives designed to help the SEC enforcement staff proactively detect and prevent securities law violations….
Schapiro pointed to the SEC's record 735 enforcement actions, which returned more than $2 billion to investors, as evidence that these efforts to modernize the agency and bolster its knowledge base are already bearing fruit. Division of Enforcement Director Robert Khuzami echoed these remarks, saying that the agency's risk-based initiatives are paying off and that the SEC is being more proactive, which has, in his view, resulted in more deterrence. Declaring a new “entrepreneurial” spirit and ethos, Schapiro and Khuzami made clear that the SEC intends to redouble its enforcement efforts across the board.
Rakoff Seeking Truth of Wall Street Wrongdoing Labeled Rogue
Kambiz Foroohar and David Glovin, Bloomberg
U.S. District Judge Jed Rakoff doesn't shy away from high-profile fights….
Rakoff sits on the court for the Southern District of New York, which covers Wall Street. He has presided over a number of heavyweight financial lawsuits and currently is overseeing the case of former McKinsey & Co. head Rajat Gupta, who's charged with insider trading. The judge is also embroiled in a battle with the Securities and Exchange Commission over what he considers its tepid enforcement of the law.
SEC Files Rare Subpoena Enforcement Action against Wells Fargo
David Smyth, Cady Bar the Door
Though it hardly seems this way from the outside, the SEC's enforcement staff is in a somewhat difficult position in its investigations. The staff issues voluntary requests or administrative subpoenas to entities with potentially responsive documents, and then it waits. If a company doesn't respond quickly, or at all, what is the SEC going to do? Sue? Remember that in the investigative stage no judge is in place to hear a motion to compel, as there would be with a publicly filed action in federal court.
But, yes, maybe the SEC will sue. If the circumstances are extreme enough, the SEC will file a subpoena enforcement action to seek to compel production of documents sought in the subpoena. As it did yesterday in this matter against Wells Fargo in the Northern District of California….
Regulator at a crossroads
Michael McKiernan, Canadian Lawyer Magazine
The Ontario Securities Commission is looking far beyond the province's borders as it formulates a plan for its future approach to regulation. High-profile proceedings against Chinese companies have forced the commission to confront the challenges of pursuing foreign-based companies, while enforcement initiatives unveiled late last year borrow heavily from measures already in place at regulators internationally.