SEC Chair Jay Clayton described the performance of the Division of Enforcement (the "Division") over the course of his term as being "investor-focused, nimble and vigorous."
In a speech before the Institute for Law & Economics at the University of Pennsylvania Law School, Mr. Clayton praised the Division for undertaking initiatives that will have "real, lasting [positive] impacts" for retail investors. Among these initiatives are the Retail Strategy Task Force and the Share Class Disclosure Initiative ("SCDI"). He highlighted efforts concerning the SEC's regulation of initial coin offerings, including its issuance of an investigative report applying the securities laws' regulatory framework to blockchain and distributed ledger technologies, and the creation of the Cyber Unit. Chair Clayton also called attention to the Division's actions against issuers and individuals that exploited the COVID-19 pandemic to facilitate fraudulent activities.
Mr. Clayton noted that the SEC is guided by various "defining principles" in evaluating and managing its enforcement efforts. These principles are: (i) rectifying the harms done to retail investors by seeking to return money to them as "promptly as practicable"; (ii) focusing on substantive matters with long-term, beneficial effects on investors (e.g., eliminating widespread fraud); and (iii) shoring up the "integrity and fairness" of the capital markets. Mr. Clayton argued that to evaluate the SEC enforcement program's success, additional metrics should be used to adequately reflect these principles. Mr. Clayton credited (i) the SEC's environment of "deference, cooperation and support," (ii) "exemplary" and dedicated leadership, and (iii) the integration of the enforcement program's agenda into the efforts of the SEC's policy divisions and offices, with facilitating the SEC's enforcement achievements.
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