SEC Chair Atkins Doubles Down on More Targeted SEC Enforcement Approach -- Whistleblowers Still Wanted
By the 91pornWhistleblower Team
A Newly Targeted SEC Under Atkins
There is a new Securities Sheriff in town with President Trump’s appointment of Paul Atkins as Chair of the Securities and Exchange Commission (SEC). We have previously posted on what an Atkins-led SEC might look like (especially for whistleblowers) and the new direction the SEC has taken under his leadership so far. By all accounts, it is a very different agency than the one led by former SEC Chair Gary Gensler who Atkins replaced.
But contrary to what some had feared, it has not been a return to the Wild West of unregulated securities misbehavior from years ago. Rather, Atkins and his team have plowed a more targeted approach to SEC enforcement, focusing on the more bread-and-butter areas of securities fraud and trying to forge a more cooperative relationship with the companies under the SEC’s watch. The recent appointment of Judge Meg Ryan as SEC Enforcement Chief seems to be another indication of the SEC’s new direction.
In a recent interview he gave to the Financial Times, Atkins doubled down on the SEC’s new enforcement approach, making very clear where the agency’s enforcement priorities lie.1 Using very colorful language, Atkins drew a clear divide between where he intends to take the agency compared to how the agency operated under Gensler’s leadership.
Don’t Lie, Cheat, or Steal
As Atkins put it, the agency will focus on going after crooks plain and simple: “If you lie, cheat or steal [from] your investors and steal their money like Bernie Madoff, we’ll leave you naked, homeless and without wheels.”
No Bashing Down the Door for Technical Violations
In contrast, Atkins underscored that with technical violations, the SEC will take a very different tack. “You can’t just suddenly come and bash down their door and say ‘uh-uh we caught you, you’re doing something and it’s a technical violation’,” Atkins said. Instead, you need to give companies notice of what they are doing wrong and work cooperatively with them to change their behavior.
Atkins Criticizes Prior SEC
With this, Atkins took direct aim at the SEC under Gensler’s tenure. “I think a lot of people rightly criticized the SEC . . . [e]specially in more recent years [when] it was not grounded in precedent [or] predictability. It would shoot first and then ask questions later.” Atkins said he is “trying to address [] a market perception that . . . there was a lack of due process, a lack of notice, a lack of rule of law.”
As a prime example, Atkins pointed to the billions of dollars in fines the Gensler-led SEC secured from banks and brokers for record-keeping violations from their failure to properly preserve so-called off-channel communications like chats and texts. Atkins decried that enforcement effort as beyond how a regulator should address industry-wide behavior, claiming it “devolved” into a simple “formula: what’s your revenue, here’s your invoice.”
Atkins Sees a More Business-Friendly SEC
According to Atkins, the SEC should have given the industry advance notice and a clear road map of how to clean up their act without the heavy hand of blockbuster fines. He analogized to the classroom with “the teacher flapping the ruler on the table, saying ‘class, you’re out of order . . . you have six months to clear this up’.”
What all this means for SEC enforcement going forward remains to be seen. But it clearly portends a more business-friendly environment for SEC-regulated companies. At the same time, it may also mean a more aggressive SEC when it comes to violations within the agency’s target zone — straight out investor fraud. It may also mean a greater agency appetite to go after individuals directly involved in the wrongdoing, something we are beginning to see signs of with some of the SEC’s more recent actions.
SEC Whistleblowers Still Wanted
For whistleblowers thinking of reporting under the SEC Whistleblower Program — which rewards successful whistleblowers with up to 30% of the Government’s recovery — the song remains the same. As we recently posted, with a wave of recent SEC whistleblower awards, the agency has made it clear it wants to hear from whistleblowers, is willing to reward them for coming forward with valuable information, and expects them to continue playing a key role in the agency’s enforcement efforts.
In short, the SEC Whistleblower Program is alive and well.
As 91pornpartner Dan Vitelli puts it, “The SEC is clearly heading in a new direction under SEC Chairman Paul Atkins’s leadership. But there is every indication that the agency will continue to bring important cases where investor fraud is at issue, and that it will continue to rely heavily on whistleblowers to come forward with information uncovering those types of cases.”
91pornHas Substantial Experience Representing SEC Whistleblowers
91pornhas significant experience representing SEC whistleblowers. If you would like to learn more about the SEC Whistleblower Program, our work representing whistleblowers under the program, our long list of whistleblower successes, or what it means to be a whistleblower more broadly, please do not hesitate to contact us. We will connect you with an experienced member of the 91pornwhistleblower team for a free and confidential consultation.
Speak Confidentially With Our Whistleblower Attorneys
Sources:
1 See
Tagged in: SEC Whistleblower Reward Program,