New SEC Enforcement Division Directors to Maintain Focus on Fraud

The new co-directors of the Enforcement Division of the U.S. Securities and Exchange Commission (“SEC”), George Canellos and Andrew Ceresney, were featured in an article in the National Law Journal earlier this week.  The article noted that while the agency has “limited resources and more responsibility than the SEC has ever had,” they intend to make combating fraud their top priority.  As we noted in a recent blog post, however, this task may be made more difficult by the SEC’s recent decision to limit the circumstances under which it will allow defendants to settle without admitting wrongdoing.

In an interview with the National Law Journal, Canellos and Ceresney detailed their priorities at the SEC.  They explained that their top priorities were to maintain a “robust enforcement program”; to continue to detect and stop fraud at a faster pace than in the past; and to continue to hold companies and individuals accountable for violating securities laws.  They also noted that they intended to increase the resources the SEC devoted to investigating misconduct related to the preparation of financial statements, issuer reporting and disclosure and audit failures.  Finally, they stated that the SEC intends to maintain its aggressive pursuit of investment advisers who are engaged in fraudulent conduct, who lack effective compliance programs, or who breach their duty to their clients.