Implications of Recent Developments in SEC Enforcement: A Six Month Review

In a March 2009 advisory, we reported on several developments during the first few weeks of a new administration and a new Securities and Exchange Commission (SEC) chair that signaled more aggressive SEC enforcement activity. These changes included dropping a practice requiring full Commission approval before Commission staff began negotiating civil monetary penalties with public companies; dropping the requirement for full Commission review of formal orders of investigation; and proposed legislation to expand SEC resources.

In the six months since the new SEC chair was sworn in, a number of notable developments have occurred. The SEC has demonstrated heightened aggressiveness, both in particular enforcement actions (including the announcement of three settlements during the first week of August 2009, each involving penalty payments over US$10 million) and public announcements, including most recently a speech by the Director of the Enforcement Division to the New York City Bar Association on August5, 2009. This advisory discusses further significant developments.