SEC Commissioner Explains Approach To Enforcement Actions

SEC Commissioner Hester M. Peirce explained her reasoning for often voting against enforcement recommendations, arguing that although enforcement is an important tool for the SEC, it should not act as an enforcement agency.

In remarks at the 50th Annual Rocky Mountain Securities Conference, Ms. Peirce outlined three considerations guiding her approach to enforcement actions. First, Ms. Peirce asserted that the SEC should use the other tools at its disposal before using enforcement resources, especially in cases of minor violations. According to Ms. Peirce, the "broken-windows approach," in which minor violations are vigorously pursued, does not serve the SEC's goals or purpose. She argued that the Office of Compliance Inspections and Examination ("OCIE") should prioritize keeping an open, productive relationship with private parties, and avoid using enforcement to settle matters. According to Ms. Peirce, the "broken-windows approach" causes negative effects, such as: