SEC Acting Chair Allison Herren Lee - in consultation with SEC Division of Enforcement (the "Division") Acting Director Melissa Hodgman - reinstated the sub-delegation of the authority to issue Formal Orders of Investigation to senior Division staff. A Formal Order of Investigation allows Division staff to issue document subpoenas and take sworn testimony.
Senior officials have not had such authority since February 2017, when then-Acting Chair Michael Piwowar revoked the sub-delegation authority, reserving the authority of the Division Director. The Commission delegated the authority to issue Formal Orders to the Division Director in 2009.
Commentary
This is largely a symbolic gesture which is likely more significant as a harbinger of the Commission's expected shift to a more aggressive approach to enforcement than for its impact on SEC investigations. As a practical matter, the SEC enforcement staff rarely, if ever, had problems getting requests for formal orders approved by the Division Director since the sub-delegation was revoked in 2017. While the restoration of this authority may allow the staff to open formal investigations and issue subpoenas a bit faster in some cases, the change is unlikely to have a broad effect on the SEC enforcement program.
Primary Sources
- SEC Statement, Allison Herren Lee: Statement on Empowering Enforcement to Better Protect Investors
- SEC Memorandum: Review of Certain Actions Taken by Commissioner Michael Piwowar as Acting Chair
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