Breaches of fiduciary duties by investment advisors are among the "core" types of enforcement cases that the Securities and Exchange Commission will continue to focus on, Sam Waldon, acting director of the Division of Enforcement, said Friday.
Waldon set out the agency's enforcement priorities at the SEC Speaks conference in Washington, held by the Practising Law Institute, and thanked Paul Atkins, the SEC chair, for recently appointing him to head the division.
On March 16, Judge Margaret Ryan resigned as director of the Division of Enforcement. Waldon, who was serving as principal deputy director, was named acting director.
Ryan became the SEC's enforcement chief on Sept. 2. The commission is expected to announce a permanent successor for Ryan in the coming weeks.
"It has been an unusual, unique period of time of transition for the division," Waldon said. "But I will say the one constant has been the staff and their hard work, professionalism and resilience."
Added Waldon: "Acting does not mean inactive," he said, quoting Atkins. "We've accomplished a lot in the last seven months with Judge Ryan. We've built a lot of good momentum. My marching orders are clear, we are to keep doing what we've been doing — full steam ahead. So that's what we're going to do. "
Effective Enforcement
What's an effective enforcement program?
"Folks like to focus on the numbers — the number of cases, the amount of disgorgement," Waldon said, but the division has "been directed to focus on quality over quantity, bringing cases against those who lie, cheat and steal, and that's what we're going to do."
What does that look like?
Protecting investors is job one, Waldon said. It also means focusing on the core types of cases — insider trading, market manipulation, accounting and financial disclosure cases, offering frauds and breaches of fiduciary duties by investment advisors.
While those types of cases "are the highest priority," the agency will continue to bring non-fraud cases in the right circumstances, Waldon continued.
"Not all non-fraud charges are the same," he said. "Some of our non-fraud regulations, rules are incredibly important because they protect against having fraud or investor harm occur in the first place. The Custody rule is the perfect example of that."
Robust Docket
The division has "a robust and diverse docket" of cases going forward, including misconduct among advisors and broker-dealers, Nicholas Grippo, chief litigation counsel in the enforcement division, added on the panel with Waldon.
"We are busy and we continue to be busy," he said.
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