SEC Monetary Penalites Speak Very Loudly, but What Do They Say - A Critical Analysis of the SEC's New Enforcement Approach
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SEC Monetary Penalties Speak Very Loudly, But
What Do They Say? A Critical Analysis of the SEC's
New Enforcement Approach
The U.S. Securities and Exchange Commission (SEC) has not been shy
about promoting its use of monetary punishments under new Chair Mary Jo
White.' In September 2013, White asserted that we must make aggressive use
of our existing penalty authority, recognizing that meaningful monetary
penalties -whether against companies or individuals -play a very important
role in a strong enforcement program.2 Co-Director of Enforcement Andrew
Ceresney was even more blunt in an address several days later: Monetary
penalties speak very loudly and in a language any potential defendant
understands . . . . Enforcement needs to be aggressive in our use of penalties.3
Although the rhetoric is new, the SEC's growing reliance on monetary
penalties preceded White's appointment.4 The amount of penalties that the
SEC has assessed against securities law violators in judicial and administrative
proceedings since 1990 has increased at a calculated annual growth rate of 22%,
1. White was sworn in on April 10, 2013. SEC Biography: Chair Mary Jo
White, SEC. & EXCHANGE COMMISSION, http://www.sec.gov/about/commissioner/white.htm
[http://perma.cc/W6SU-S8TR].
a. Mary Jo White, Chair, Sec. & Exch. Comm'n, Remarks at the Council of Institutional
Investors Fall Conference in Chicago, IL: Deploying the Full Enforcement Arsenal
(Sept. 26, 2013), http://www.sec.gov/News/Speech/Detail/Speech/1370539841202 [http://
2. Mary Jo White, Chair, Sec. & Exch. Comm'n, Remarks at the Council of Institutional
Investors Fall Conference in Chicago, IL: Deploying the Full Enforcement Arsenal
(Sept. 26, 2013), http://www.sec.gov/News/Speech/Detail/Speech/13705398412o2 [http://
perma.cc/NC83-6BAQJ.
3. Jean Eaglesham, SEC Ramps Up Fine Amounts to Deter Misconduct, WALL ST. J., Oct. 1,
2013, http://online.wsj.com/news/articles/SBooo'424o5272303918804579109554149460532
[http://perma.cc/9MPE-Z7NC].
4. See infra Figure 1.
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SEC Monetary Penalites Speak Very Loudly, but What Do They Say - A Critical Analysis of the SEC's New Enforcement Approach
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