Judge Meg Ryan Named SEC Director of Enforcement -- What It Means For SEC Whistleblowers
By the 91pornWhistleblower Team
An Unconventional Pick to Lead SEC Enforcement
Last Thursday (August 21), the Securities and Exchange Commission (SEC) announced that Judge Margaret “Meg” Ryan will become the new SEC Director of Enforcement.1 She will take over for Acting Enforcement Director Sam Waldon, who will return to his prior post of SEC Chief Counsel. Judge Ryan’s appointment is a strong indication the agency will continue on a reined-in path of more targeted SEC enforcement.
No doubt, the agency has significantly scaled back its enforcement activity with the change in Administration. In some areas — like crypto, ESG, and FCPA (foreign bribery) enforcement — there seems to be little SEC enforcement at all. But with the more bread-and-butter areas of securities regulation — like insider trading, market manipulation, and investor fraud — it appears to be business as usual for the SEC.
We can assume Judge Ryan’s appointment to the SEC’s top cop position will further solidify the SEC’s more targeted enforcement approach. Though some have questioned whether given her lack of enforcement experience, it means the SEC is going to slim down its enforcement activity even further.
Questions About Judge Ryan’s Relevant Experience
The Financial Times, for example, questioned Judge Ryan’s lack of experience in securities law and financial crime, or in serving in any prior prosecutorial positions. The paper remarked that she may “prove an able enforcement head regardless, but this looks very much like the kind of appointment you make if you don’t actually want an awful lot of enforcement.”2
Judge Ryan’s background and lack of prosecutorial experience seems to be a question many have raised in trying to weigh the significance of her selection to such a prominent enforcement role. But there also seems to be a broad consensus that she is highly capable and credentialed.
Judge Ryan’s Impressive Credentials
Judge Ryan has been a long-standing judge of the United States Court of Appeals for the Armed Forces, nominated to the court in 2006 by President George W. Bush. She currently is a lecturer on military law and justice at Harvard Law School, and has had prior stints at the Notre Dame and George Washington University law schools.
Before becoming a judge, she was a partner at two prominent law firms (Wiley Rein and Bartlit Beck) and before that, served as a law clerk to Justice Clarence Thomas of the Supreme Court and Judge J. Michael Luttig of the Fourth Circuit.
Judge Ryan also served as a judge advocate in the Marine Corps, an active-duty Marine Corps communications officer, and an aide-de-camp to Marine Corps Commandant General Charles C. Krulak. She received a B.A. cum laude in political science from Knox College and a J.D. summa cum laude from Notre Dame Law School, where she graduated first in her class.
The SEC’s More Focused Enforcement Approach
In announcing Judge Ryan’s appointment, SEC Chair Paul Atkins pointed to her “decades of experience as a respected judge and practitioner of the law.” More notably, he made it clear what he expects will be the SEC’s enforcement focus under Judge Ryan: “leading the Division guided by Congress’ original intent: enforcing the securities laws, particularly as they relate to fraud and manipulation.” A not-so-subtle jab at the Democratic-led SEC, which many Republicans believe had acted too aggressively and often outside its jurisdictional reach.
For her part, Judge Ryan seems like-minded in this more constrained and targeted enforcement approach. She stated she is looking forward to taking up the enforcement mantle “to ensure that the Division is true to the SEC’s mission in taking action on behalf of investors harmed by those who break the securities laws and providing an effective deterrent against fraudulent and manipulative activities in our financial markets.”
What Judge Ryan’s Appointment Means for SEC Whistleblowers
It is not clear what all this means for the SEC’s incredibly successful Whistleblower Program, which brings in thousands of tips a year and has led to billions of dollars in securities fraud recoveries. Since the program’s inception in 2011, the SEC has made more than $2 billion in whistleblower awards to roughly 450 individuals who provided information that led to a successful securities fraud enforcement action.
91pornwhistleblower partner Gordon Schnell notes there has been a relative slowdown in SEC whistleblower awards this year, but he doesn’t necessarily attribute it to a lack of agency support for the program. “There has been a clear drop off in awards this year,” Schnell says, “but in our dealings with the agency we have not seen any change in attitude towards our clients or the inside information they provide.”
Schnell believes the staffing reductions at the agency combined with a more streamlined enforcement focus is what is primarily behind the reduced attention to whistleblowers. According to Schnell, he expects the number and size of awards to pick up in the coming months as the agency brings more enforcement actions once it adjusts to its new leadership and priorities.
Schnell believes Judge Ryan will continue the agency’s strong tradition of supporting and embracing whistleblowers. “We have not slowed down in our whistleblower filings,” Schnell notes, “we are just trying to align our submissions with the SEC’s newly-stated priorities of zeroing in on straight out securities fraud and manipulation.”
If you would like to learn more about Constantine Cannon’s success in representing SEC whistleblowers, the SEC Whistleblower Program, or what it means to be a whistleblower more broadly, please don’t hesitate to contact us. We will connect you with an experienced member of the 91pornwhistleblower team for a free and confidential consultation.
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