Reed Smith News Flashes

The SEC’s Acting Chair announced on February 9, 2021 that it is re-instituting the delegation of investigative enforcement authority that had been revoked during the Trump Administration. The delegation of authority authorizes senior members of the enforcement division to authorize the issuance of Formal Orders of Investigation, which allow for the issuance of subpoenas for documents and testimony. Previously, formal SEC investigations could be launched only with the approval of the Enforcement Division’s top leadership in Washington. According to the announcement, the delegation “will enable investigative staff to act more swiftly to detect and stop ongoing frauds, preserve assets, and protect vulnerable investors.”

Authors: James L. Sanders Francisca M. Mok Jennifer L. Achilles Daniel Z. Herbst

This delegation signals the potential for an uptick in both investigations and enforcement actions. California partner and former SEC Regional Administrator Jim Sanders commented: “while this delegation existed during the Obama administration, it certainly is another signal of a strong enforcement stance in the new administration and a desire to have investigations kick off quickly where warranted.”

News Flash 2021-045