SEC Chairman Walter on "Making the Markets Safe for Informed Risk-Taking" (with Lofchie Comment)

SEC Chairman Elisse Walter delivered remarks on informed risk-taking for investor protection and confidence. In her speech, the Chairman urged legislators and regulators to maximize stability and minimize risk, enhance capital requirements, minimize moral hazard and increase scrutiny by regulators. Walter states that regulators should protect investors against fraud and ensure that those who invest are sufficiently sophisticated and able to bear the risk. Among the specific issues raised by Chairman Walter were (i) that the SEC have sufficient tools to detect fraud and insider trading, (ii) that issuers make appropriate disclosure not only as to financial issues, but also as to the risks created by, for example, dual class voting structures, and (iii) that there not be further breakdowns in the exchange markets such as we have experienced in the last year.

Lofchie Comment: Although she did not say so explicitly, I took the Chairman's remarks as reflecting a good degree of anxiety as to the implementation of the JOBS Act, and whether that will prove a benefit to retail investors, or whether they will invest disproportionately in high-risk ventures that they are not prepared to evaluate.

View speech in full here (links externally to SEC website).See also: Commissioner Aguilar on Addressing Market Instability Through Informed and Smart Regulation; Commissioner Paredes' Remarks at The SEC Speaks in 2013; Commissioner Gallagher Remarks.