SEC Enforcement Priorities: Rocky Mountain Securities Conference

The first panel of speakers included SEC Deputies of Enforcement George Curtis and Scott Friestad, moderated by Hogan & Hartson partner, Daniel Shea.

First, Mr. Curtis and Mr. Friestad spoke about the SEC’s attempt to streamline the Wells Process, indicating that at times this process can take as long, or longer than the actual investigation.

Mr. Curtis then expressed that the Commission will be bringing more focused cases against fewer individuals, and attempt to get cases through more efficiently.

The panelists also covered new insider trading enforcement actions involving credit default swaps. The New York regional office recently brought an insider trading case against a trader who obtained information on a debt restructuring plan, subsequently traded on such information before public disclosure. Friestad described this as the SEC’s first insider trading action involving credit default swaps, and attributed this new trend to the subprime mortgage crisis.

Shifting gears, Mr. Shea then prodded the Deputies about the fairness of imposing corporate penalties years after alleged misconduct, when the shareholders have since cycled through. Deputy Curtis explained that the composition of shareholders is a consideration, while stressing that deterrence is more important.

The panel concluded with discussion about director and officer bars, and consistency throughout the regional offices. Mr. Curtis explained that a 5 year bar is standard procedure, and the Commission has no plans for changes in this area. 

The next post concerns the planned initiativs for the Division of Corporation Finance.