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February 27, 2017 at 07:00 PM
If confirmed, incoming Securities and Exchange Commission Chair Jay Clayton will be busy filling open vacancies on his staff — particularly top posts like division heads and a chief of staff.
But advisors and broker-dealers shouldn’t count on SEC staff twiddling their thumbs in the meantime.
“In the short term, folks need to remember that, especially from an investigative and exam staff [standpoint], it will be a lot of business as usual,” Stephen Cohen, former associate director in the SEC’s Division of Enforcement, told me in a mid-February interview.
Cohen, who recently joined Sidley Austin LLP as a partner in the Securities & Derivatives Enforcement and Regulatory practice, noted that the agency has “hundreds of career staff that don’t take day-to-day direction from political appointees.” Indeed, Office of Compliance Inspections and Examination staff has already published its schedule for 2017. “They’re going to execute on that schedule,” he said.
OCIE director Marc Wyatt said that he’d leave the agency in February. Pete Driscoll, chief risk and strategy officer for OCIE, will become acting director. Driscoll served as OCIE’s managing executive from 2013 through early 2016.
OCIE wasted little time after detailing its exam priorities in January to release a risk alert in February flagging the top five compliance failures the agency has detected in advisor exams.
OCIE said the list of compliance failures were sent to SEC-registered advisors via deficiency letters.
Staffers Looking for Violations and ‘Frauds’
While the new presidential administration gets settled, and Clayton starts filling his open-positions roster, Cohen said “the enforcement division, along with the asset management unit, does have professional staff that are looking for violations and looking for frauds, and they are going to open investigations and investigate them.”
Besides two new open commissioner spots — which are appointed by the president — Wyatt is one of a host of executive posts that Clayton will have to fill.
Andrew Ceresney, the SEC’s head of enforcement, departed at year-end, leaving Deputy Director Stephanie Avakian as acting enforcement head.
Keith Higgins, director of the Division of Corporation Finance, left the agency in early January; Shelley Parratt, deputy director, is now acting director.
The agency’s general counsel, Ann Small, has also departed the SEC; the acting general counsel is Sanket Bulsara, deputy general counsel for Appellate Litigation, Adjudication, and Enforcement.
