SEC Un-Delegates Enforcement Authority
Commentary by Jeff Ziesman
In a final rule, the SEC amended regulations to eliminate the Director of the Division of Enforcement's authority to issue formal orders of investigation.
The Commission rescinded the 15-year old policy that allowed the Director of Enforcement to commence investigations and issue subpoenas in order "to increase effectiveness by more closely aligning the Commission's use of its investigative resources with Commission priorities." The SEC Staff had previously been informed that any requests to open an investigation were required to go through the Commission, rather than being handled by the Directors. This action formalized the requirement.
The amendment is effective on the date of publication in the Federal Register.
Commentary
This move should allow SEC resources to be deployed in a matter consistent with the overall Commission objectives and achieve uniformity within the SEC to closely adhere to those overall objectives. While this modification may slow down the commencement of investigations, regulated entitles will likely experience increased consistency in the approach and timing of investigations.