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SEC Commissioner Aguilar Focuses on Enforcement

In a recent speech, SEC Commissioner Aguilar discussed how the SEC has strengthened its enforcement activities.  In discussing future enforcement priorities, he stated that “I expect that the Commission will continue to take a tougher stance against SROs that do not faithfully discharge their primary duties as regulators of the marketplace.”  Commissioner Aguilar noted that the September 2012 penalty of $5 million against the New York Stock Exchange was the first time the Commission had ever imposed a financial penalty against an exchange.  Given the importance of technology in today’s capital markets, he emphasized the importance of the Commission taking “proactive steps to prevent unacceptable market disruptions . . . .”  Commissioner Aguilar encourage the Commission to adopt a final Regulation SCI, which would “require SROs and other entities to, among other things, establish, maintain, and enforce written policies and procedures reasonable designed to ensure that their systems have sufficient capacity, integrity, resiliency, availability, and security.”

Commissioner Aguilar also addressed the SEC’s new policy that would require admissions when such admissions are in the public interest, ending the SEC’s prior “neither admit nor deny” policy.  He expressed hope that the policy would evolve beyond requiring defendants to merely admit facts, “but also accepting fault for their misconduct, and admitting to having violated specific provisions of the law.”  He acknowledged that requiring such admissions would make it more difficult for the Commission to settle cases, stating “for this approach to be effective we must be ready, willing, and able to go to trial.”

Commissioner identified “the willingness to use all of the tools at our disposal and the willingness to fight for strong sanctions” as keys to establishing a “robust Enforcement program.”  He stated “while it is customary for Commission representatives to talk the tough talk about enforcement, I am optimistic that the current Commission will walk the walk.

The Commissioner’s speech is available here