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5 First-of-Their-Kind SEC Enforcement Actions

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Related: 10 Worst Financial Advisors in America: 2020

SEC Enforcement Director Gurbir Grewal pointed Wednesday to notable first-of-their-kind enforcement actions his division has recently taken, and stated that the Wells notice process needs to be streamlined, starting with the Wells meeting itself.

The SEC sends a Wells notice to firms when it’s planning to bring an enforcement action; the notice is issued at the conclusion of an SEC investigation.

Grewal said in comments at the Practising Law Institute’s SEC Speaks event that while he appreciates the importance of the Wells process, there are “certainly cases that present novel legal or factual questions, or raise significant programmatic issues. In those cases the Director or Deputy should be directly participating in the Wells meeting, and there should be robust engagement.”

However, he continued, “many cases do not present such issues,” and in those cases it’s not a productive use of time for the director or deputy director “to sit in on a second or third meeting with defense counsel at the end of an investigation.”

In those circumstances, Grewal continued, “it is more efficient and appropriate for the Associate Director or Unit Chief to take the Wells meeting and engage in a dialogue, alongside the staff who are best positioned to assess the record.”

Grewal noted the while he and the deputy director of enforcement will still review Wells submissions, and still provide them to the commission in connection with the related recommendations, “don’t expect a meeting in each and every case.”

Grewal noted that “there are also some well-established — but not always observed — rules about Wells submissions themselves that can lead to their rejection by the staff, such as attempts to limit their use or admissibility, or attempts to include a settlement offer.”

As to recent enforcement actions, Grewal explained that the risks the SEC protects against “are not fixed and what’s important to investors and the market can evolve over time.”

That’s why the enforcement division “is — as it always has[ been] — taking proactive steps to police those issues as well by bringing a number of first of their kind enforcement actions.”

See the gallery for five recent, first-of-their-kind enforcement actions the division has levied.

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