SEC Delegates Additional Authorities to the Director of Enforcement

The SEC adopted an amended rule to revise the delegated authority of the SEC Division of Enforcement Director (the "Director"). According to the SEC, the revisions are meant to conserve resources and increase efficiency, and are the result of experience with (i) nonpublic investigations, (ii) litigation in Federal court, and (iii) disgorgement and Fair Fund plans in administrative and cease-and-desist proceedings.

The final rule, which amends SEC Rule 200.30-4 ("Delegation of authority to Director of Division of Enforcement"), delegates to the Director the discretion to dismiss claims that are:

• against entities that are defunct, the subject of bankruptcy proceedings, or without material assets; and
• duplicative of other pending claims against those entities.

Additionally, the final rule authorizes the Director to:

• file applications in Federal court to seek customer financial records from financial institutions without prior notice to the customer under Section 21(h)(2) of the Exchange Act;
• institute public administrative proceedings and issue orders with respect to a security based on the issuer's alleged failure to file required periodic reports under Section 12(j) of the Exchange Act;
• grant extensions to submit proposed distribution plans;
• appoint tax administrators;
• publish notice of proposed plans;
• issue orders adopting plans; and
• approve disbursements, payment of administration fees and final fund accountings with respect to disgorgement funds and Fair Fund plans in administrative or cease-and-desist proceedings.

The final rule delegating these additional authorities went into effect on December 29, 2020.