Brokers, Compliance, News

Review Your WSPs – Subpoenas are Coming

The authority to open SEC investigations, and therefore to issue subpoenas, was expanded under the Obama Administration to the director of Enforcement, rather than solely to the Commission itself. The Director of Enforcement then delegated that authority to various senior officials, including regional and associate directors and specialized unit chiefs. The number of investigations thereafter rose.

The Trump Administration limited that authority to senior officials, which reduced the number of investigations declined.

On February 9, 2021 the Biden Administration made another change,  and authorized senior officers in the Enforcement Division to approve the issuance of a Formal Order of Investigation.

Returning this authority to the division’s experienced senior officers, who have a proven track record of executing it prudently, helps to ensure that investigative staff can work effectively to protect investors in an era when the pace of fraud – like the pace of markets themselves – is ever more rapid.

We can expect more SEC investigations down the line, and more enforcement actions. Now is the time to insure that your compliance documents are in order, and that your written supervisory procedures accurately reflect how your firm operates, and that those procedures are being followed.

Need assistance? The attorneys at Sallah Astarita & Cox are include former SEC Enforcement attorneys, and experienced broker-dealer and investment adviser attorneys. Call 212-509-6544 or email to find out how they can help you avoid an enforcement proceeding.


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