Top 5 SEC Enforcement Developments For May 2022

In order to provide an overview for busy in-house counsel and compliance professionals, we summarize below some of the most important SEC enforcement developments from the past month, with links to primary resources. This month we examine:

• The SEC's continued focus on environmental, social, and governance ("ESG") disclosures and cryptocurrency markets;
• The SEC's in-house courts under attack;
• The Second Circuit's decision in Noto v. 22nd Century Group, Inc.; and
• The SEC's billion-dollar case against a prominent investment adviser.

1. SEC Brings ESG Enforcement Action and Proposes New ESG Rules

On May 23, 2022, the SEC charged a registered investment adviser with misrepresenting its approach to ESG-related investments. In a settled order resolving a matter pursued by the SEC's Climate and ESG Task Force, the SEC found that between July 2018 and September 2021, the adviser represented that all of its stock and bond picks had undergone quality reviews