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Regulation and Compliance > State Regulation

SEC Expected to Shift Focus to Advisors, BDs Under Biden

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The incoming Biden administration will bring a “heightened level of enforcement activity” at the Securities and Exchange Commission, specifically concerning investment advisers and broker-dealers, according to just-released analysis by the law firm Gibson Dunn.

In the firm’s 2020 Year-End Securities Enforcement Update, which also includes a look ahead to 2021, the firm said to expect the SEC to shift its focus and priorities “away from retail investors and securities offering frauds and an increased emphasis on the conduct of institutional market participants — investment advisers and broker-dealers, as well as public company accounting, financial reporting and disclosure.”

In fiscal 2020, the SEC’s cases against investment advisors comprised 21% of the agency’s total number of cases — a drop from 36% of the total in fiscal 2019.

Assuming Gary Gensler, President Joe Biden’s pick to be the new SEC chief, is confirmed by the Senate, “his experience, both at the helm of the CFTC and since, confirm expectations for increased regulation and enforcement,” Gibson Dunn attorneys write.

Gensler, chairman of the Commodity Futures Trading Commission in the Obama administration, “presided over a period of heightened financial regulation and aggressive enforcement against major financial institutions,” the attorneys note.

At CFTC, “Gensler oversaw the implementation of an entirely new regime for the regulation of the markets for derivatives as well as the adoption of numerous regulations pursuant to the Dodd-Frank Act,” the report states, along with “aggressive enforcement actions against financial institutions” in connection with the manipulation of Libor.

Gensler’s “strong interest in, and familiarity with, the market for cryptocurrency and other digital tokens” will ensure that the market for digital assets will receive particular attention in the coming years, the attorneys predict.


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