SEC Director of Enforcement Prioritizes Restoring Public Trust in Markets

SEC Director of Enforcement Gurbir S. Grewal highlighted the importance of bolstering public trust in institutions and markets, given the recent volatility across financial and digital asset markets.

In remarks at the 2022 SEC Securities Enforcement Forum, Mr. Grewal said that there is no single cause of the public's declining trust. He said that he is focused on addressing one part of the problem: the perception that regulators can't hold bad actors accountable and apply a different set of rules to large corporations. He said that over the last year, the Division of Enforcement focused on changing that view by (i) securing "penalties and remedies that deter misconduct and meaningfully hold bad actors accountable, protect investors and, where possible, help harmed investors recover their losses," (ii) working to "investigat[e] and charg[e] cases across a spectrum of market participants and harm," and (iii) "[c]ontinuing to incentivize proactive compliance and meaningful cooperation."

Mr. Grewal noted that the Division of Enforcement monitors for misconduct using tools like sweeps that specifically target recurring issues, citing the off-channel communications sweep as a recent high-profile example (see previous coverage). Mr. Grewal underscored that firms that cooperate with SEC inquiries and investigations will generally receive beneficial settlements, including a potential reduction or elimination of penalties. He added that the Enforcement Division will continue its efforts to incentivize self-reporting and cooperation.