Gurbir Grewal, the new director of the Division of Enforcement for the SEC, signaled several potential changes in the SEC’s enforcement priorities under his new leadership. His division would “recommend aggressive use” of various remedies, notably, seeking admissions of wrongdoing as a condition of settlement in certain instances.

Some specific penalties include:

  • Barring violators from serving as officers or directors of public companies
  • Restrictions on stock trading or participating in securities offerings
  • Imposing undertakings on corporate defendants to prevent future violations, including forcing companies to hire independent compliance consultants

Grewal remarked that “few things rival the magnitude of wrongdoers admitting that they broke the law,” and thus his division “will, in appropriate circumstances, be requiring admissions in cases where heightened accountability and acceptance of responsibility are in the public interest.” Source: JD Supra

SmartRIA takeaway: The best way to avoid a penalty, admitting wrongdoing, or having to hire an independent compliance consultant as the result of an SEC exam is to have a strong compliance program to start with. Not only does SmartRIA keep you prepared for exams, it is a fundamental part of your compliance program. Schedule a demo here.

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