The Securities and Exchange Commission’s Enforcement Director Andrew Ceresney said Wednesday that the division’s asset management unit and broker-dealer task force has been “drilling down” over the past year on firms’ compliance programs as well as being “very focused” on investment advisory fraud and making sure advisors are fulfilling their fiduciary duties.
During a question and answer session at the D.C. Bar in Washington, Ceresney also said that the case of Wedbush Securities Inc., in which the firm and two officials were charged with market access violations, is a “critical case.”
Wedbush’s failure to preauthorize traders, thus opening its trading system to unknown users, “allowed for the potential of schemes by the traders,” including high-frequency traders, Ceresney said.
Ceresney also told attendees of the D.C. Bar luncheon that the agency has been using adminstrative proceedings more frequently in recent years, calling the process “sophisticated” and “more streamlined” than bringing a civil action to District Court (in an administrative proceeding, an adminstrative law judge hears the case and levies any penalties).
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“I think you’ll see use of [the administrative proceedings] more often by the agency,” he said, adding that “we will bring insider trading cases in the administrative proceedings.”
This determination, he said, “will be on a case-by-case” basis, “but you’ll see more of these insider trading cases go through the administrative proceedings.”