In its latest fiscal year, Wall Street’s top regulator sought the least amount of penalties since 2013, a drop that took place as it went months without permanent leadership and could show a softer approach to policing wrongdoing.
In lawsuits against companies and individuals, the U.S. Securities and Exchange Commission tried to obtain $3.4 billion in fines and disgorgement during the 12 months ended in September, according to data collected by Urska Velikonja, a law professor at Georgetown University. The agency filed 612 enforcement cases, also the fewest in four years, Velikonja’s research shows.
The time period includes former SEC Chair Mary Jo White’s final months at the agency, Commissioner Michael Piwowar’s brief stint leading it, and the first five months of new Chairman Jay Clayton’s tenure.
Although the data spans a transition atop the SEC, it may be early evidence that President Donald Trump’s more friendly tone toward corporations is having an impact on the regulator’s investigations into wrongdoing, according to Velikonja.
Big Firms
She points out that since Clayton -- the former Wall Street deals lawyer appointed by Trump -- took over in May, the agency has pursued just two sanctions against large financial firms: a $35 million settlement with State Street Corp. and a $97 million case against Barclays Plc.
In the same period a year earlier, more than a dozen big financial companies faced SEC sanctions, including Goldman Sachs Group Inc., Merrill Lynch & Co., UBS Group AG and hedge fund firm Och-Ziff Capital Management Group LLC, Velikonja said.
The overall decline in cases might show that the agency is shifting away from White’s so-called broken windows policy of aggressively pursuing smaller infractions to deter bigger violations, according to Velikonja.
“The big takeaway is that the sweeps are gone,” she said in an interview. “They’re not going after those technical violations.”