During a recent speech, Gurbir Grewal, recently named Director of the SEC's Enforcement Division, cited a recent Gallup poll showing that "only a small percentage of Americans have any significant level of confidence in banks, technology companies or big business." While acknowledging that there is "no single cause" for the decline in trust (which is not limited to the financial markets, but extends to institutions generally), Grewal noted that part of the trend "is due to repeated lapses by large businesses, gatekeepers, and other market participants, coupled with the perception that we--the regulators--are failing to hold them appropriately accountable...."
With that backdrop, Grewal noted that he will be looking closely at a number of areas of misconduct, including: obfuscation of evidence from the SEC or other government agencies; public company disclosures of and controls for cybersecurity incidents; and gatekeeper misconduct of lawyers and auditors. He also described steps he will take to use remedies to deter wrongdoing, such as requiring admissions "in appropriate circumstances," using officer and director bars more broadly; and requiring conduct-based injunctions or undertakings tailored to address underlying violations. He further said that he will empower the SEC Staff by reducing the number of Wells meetings he or his director attend.
Looks like the Enforcement Division is about to step things up and increase the level of scrutiny and sanctions--please take the time now to make sure you are being proactive with your compliance.
You should expect to see us recommend aggressive use of these prophylactic tools to protect investors and the marketplace, and relatedly the public’s trust that all institutions and individuals are playing by the same rule set. And we’ll take a particularly hard look at whether we need to deploy these tools if the specific offender is a recidivist. When a firm repeatedly violates our laws or rules, they should expect that the remedial relief we seek will take that repeated misconduct into account.