Under President Donald Trump, a top financial regulator isn’t embarrassing Wall Street as much as it used to.
Take TPG Capital LP -- the private-equity behemoth co-founded by billionaire David Bonderman. For years, the U.S. Securities and Exchange Commission had been investigating TPG and its competitors over concerns they were pocketing tens of millions of dollars in fees that were largely hidden from investors.
When the agency started punishing firms over the expenses in 2015, it trumpeted enforcement actions against Blackstone Group LP, KKR & Co. and Apollo Global Management LLC as examples of the government holding big financial companies accountable. All three paid at least $28 million, and each time the regulator filed a case it shined a spotlight on their alleged misconduct by issuing press releases with stern admonishments from SEC officials.
But TPG’s penalty wasn’t wrapped up until Trump took office, and the company was treated much differently. Instead of publishing a crowing press release, the SEC disclosed the sanction in a dense legal document that was quietly posted on the agency’s website after U.S. stock markets had closed. When the $13 million settlement popped on Dec. 21, many on Wall Street were already out of the office for Christmas break.
TPG isn’t the only one. In recent months, the SEC has opted not to hype some hedge-fund and big-bank cases that its Trump-appointed chairman, former Wall Street lawyer Jay Clayton, inherited from the agency’s previous leadership.
The muted sanctions include a December enforcement action in which Bank of America Corp.’s Merrill Lynch unit agreed to pay $13 million for failing to adequately monitor millions of customer accounts for money laundering and other suspicious activity.
That same month, the regulator decided not to publicize an enforcement action against Nehal Chopra -- a hedge fund manager known for appearing at industry conferences and securing an investment from famed trader Julian Robertson. The SEC’s order, posted discreetly on its website, said Chopra misled her investors by telling them her trades were based on researching stocks. In reality, a lot of her ideas came from her husband, the regulator said.
Merrill was also tied to another case that got the silent treatment: A September settlement with William Tirrell, a former Merrill executive who the SEC said played a key role in the firm misusing billions of dollars in customer funds.
The agency did issue a press release in June 2016 when it announced it had filed a complaint against Tirrell, and that Merrill would pay $415 million over the firm’s alleged misconduct. But when the SEC reached a deal with Tirrell about five months ago the accord wasn’t announced and his penalty was significantly lower than Merrill’s: $0.
Just last month, the SEC sanctioned Industrial & Commercial Bank of China Ltd. without issuing a formal press release. The world’s largest lender, and also the biggest commercial tenant in Manhattan’s Trump Tower, was accused of violating securities rules when helping clients bet against stocks. In the past, the SEC has considered such misconduct worthy of more attention. It publicized a January 2016 case against Goldman Sachs Group Inc. that involved similar allegations.