SEC Enforcement Actions Remain High

May 10, 2017

The Securities and Exchange Commission has continued its aggressive enforcement approach toward Wall Street traders. That’s according to an analysis of data that includes the first three months of the Trump administration.

Under the Obama administration, the SEC targeted relatively small infractions against a higher number of traders and companies. It was a policy goal aimed at encouraging more overall compliance with market rules. Officials compared it to the “broken window” theory of criminal justice.

According to data compiled by Cornerstone Research, that trend has continued into the first three months of this year. David Marcus, who conducted the study for Cornerstone Research, said, "In some ways it’s not that surprising because it takes the SEC sometimes a year or more for them to launch a formal case after an investigation.”    

The newly confirmed SEC chairman, Jay Clayton, has not yet indicated if he would shift focus to fewer, more high-stakes cases. He did say during his hearings that he would like to see fewer fines against companies because shareholders ultimately pay them.