SEC Enforcement Director Indicates Return to Obama-era Policy


While speaking at the Practising Law Institute’s SEC Speaks event on October 13, 2021, Gurbir Grewal, Director of the SEC’s Division of Enforcement, discussed potential changes to the SEC’s enforcement priorities. Particularly, Grewal indicated that the SEC would demand admissions of wrongdoing in appropriate circumstances.  According to Grewal, “[w]hen it comes to accountability, few things rival the magnitude of wrongdoers admitting that they broke the law, and so, in an era of diminished trust, we will, in appropriate circumstances, be requiring admissions in cases where heightened accountability and acceptance of responsibility are in the public interest.”

Grewal also discussed the powerful effect of admissions, noting that admissions “serve as a clarion call to other market participants to stamp out and self-report the misconduct to the extent it is occurring in their firm.”  Additionally, Grewal stated that the SEC would recommend the aggressive use of other “prophylactic” remedies including:

•    Barring individuals from serving as officers or directors of public companies in the future;

•    Conduct-based injunctions which enjoins a defendant from engaging in specific conduct in the future; and

•    Imposing “undertakings” on corporate defendants that are tailored to address the underlying violations and affect future compliance.

Grewal’s full remarks can be found here.
 

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About Christopher M. Lash

Christopher M. Lash's practice is focused on shareholder derivative and securities litigation. Chris is an Associate in the firm's Pennsylvania office.

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