July 22, 2019

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Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement, Assesses the Effectiveness of the SEC’s Enforcement Program

On September 20, 2018, the SEC’s Co-Director of Enforcement, Stephanie Avakian, delivered a speech assessing the effectiveness of the SEC’s enforcement program. Ms. Avakian stated that a qualitative assessment of the Division’s effectiveness makes clear that the SEC’s enforcement program had a strong year, with enforcement actions that “addressed a wide array of conduct and spanned a broad landscape.” Ms. Avakian also pointed to the breadth of the Division’s investor protection mandate as compared to the Division’s resources, stating that the “wide gulf between our resources and our responsibilities translates into a need to think very carefully about how we allocate resources.” Ms. Avakian asserted that an evaluation of the enforcement program based solely on the numbers—such as the number of cases brought or the dollar amounts of judgments or orders obtained in the fiscal year—would be misguided. Ms. Avakian cited two examples to illustrate the Division’s approach to identifying challenges and risks facing investors and markets, and developing a response that addresses those challenges in a thoughtful and effective way, while maximizing the use of resources, namely, enforcement actions concerning initial coin offerings and digital assets and the mutual fund share class selection disclosure initiative. With respect to the latter, Ms. Avakian reported that the Division received a substantial number of self-reports and that she expected that the initiative would allow shareholders to be remunerated more broadly and quickly than if the Division had pursued enforcement in a traditional manner.

A transcript of Ms. Avakian’s speech is available at: https://www.sec.gov/news/speech/speech-avakian-092018

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Vedder Price P.C. attorneys provide a full range of services to a diverse financial services clientele. Attorneys practicing in the firm’s Investment Services Group are experienced in all aspects of investment company and investment adviser securities regulations, broker-dealer regulatory and compliance matters, derivatives and financial product matters, and ERISA and tax matters. Clients include mutual fund complexes, hedge and other private funds, money managers, broker-dealers, independent directors, and many other types of institutions such as banks, savings and loans,...