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Enforcement Edge
March 1, 2023

A Need for Speed: DOJ, SDNY, SEC, and CFTC Enforcers Put the Pedal to the Metal, Emphasize Increasing Pace of Future Enforcement Actions

Enforcement Edge: Shining Light on Government Enforcement

This afternoon’s Special Conversation with Enforcers & Regulators session at the ABA White Collar Crime Conference featured heavy hitters from the Department of Justice (DOJ), Securities Exchange Commission (SEC), United States Attorney’s Office for the Southern District of New York (SDNY), and the Commodity Futures Trade Commission (CFTC), each stressing that their agencies will be emphasizing speed in bringing and concluding actions.

The panel featured Nicole Argentieri (Acting Principal Deputy Attorney General for the Criminal Division), Gurbir Grewal (Director for the SEC Division of Enforcement), Daniel Gitner (Chief of the Criminal Division for SDNY), Ian McGinley (Director of the CFTC Division of Enforcement), and Marshall Miller (Principal Associate Deputy Attorney General). The panel highlighted key areas of enforcement over the last year and provided guidance as to upcoming enforcement priorities.

Here are the key takeaways:

  • The Need for Speed: Grewal (SEC), Gitner (SDNY), and McGinley (CFTC) each emphasized that enforcement efforts over the next year will be robust and that the pace of actions and investigations will increase. The entire panel expects 2023 to be a year of increased enforcement and described efforts to build a culture in their offices that empowers staff to make decisions. Grewal emphasized that the pace of enforcement will continue to increase, even if that means shortening the Wells process, and that the SEC is looking to add additional staff.
  • Follow the Data: Argentieri (DOJ), Grewal, and McGinley stressed that their offices will continue to use data, not just to support current cases, but to generate future case leads. Argentieri emphasized that data will continue to play a particularly important role in detecting wrongdoing in the financial markets.
  • Culture of Compliance: The panel highlighted recent government efforts to create a robust and proactive corporate culture of compliance. Grewal stressed the SEC’s escalation in the size of penalties over the last year—totaling approximately $4.2 billion, more than the prior three years combined—as a method to force corporations to recalibrate the importance of compliance. Miller (DOJ) highlighted the DOJ’s efforts to be more transparent, predictable, and uniform across USAOs in how it approaches self-disclosure and monitoring policies. Miller noted his hope that this approach will make it more predictable for the corporate community to internalize the benefits of a robust compliance and self-disclosure program.
  • National Security Emerges as a White Collar Priority: Miller and Gitner separately highlighted the growing intersection between corporate white collar crime and national security issues. Miller noted that DOJ will surge resources to this space, and the Deputy Attorney General is expected to soon announce the first-ever Chief Counsel for Corporate Enforcement in the National Security Division. Gitner also emphasized the increase in sanctions enforcement since Russia’s invasion of Ukraine.
  • Crypto and Digital at the Forefront: Gitner noted that SDNY will remain at the “frontlines” of enforcement actions in the digital asset space, which will be an increasing area of future prosecution. All panelists anticipate an increase in enforcement in the cryptocurrency space, with the panelists emphasizing investor protection. Grewal expects increased enforcement focus on crypto-intermediaries who fail to register with the SEC. McGinley added that the CFTC is “naturally interested” in cybercrime and noted that the “future is in cyberspace.” He highlighted the need to prosecute cyber-enabled crimes, such as “pump and dump” schemes facilitated via social media.

More to come here from Miami! Continue to follow Enforcement Edge for updates.

© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.