SEC will allow enforcement staff go launch investigations allowing for subpoenas to companies for records or testimony

The Securities and Exchange Commission will give more power to its enforcement staff to launch investigations, an early sign that it plans to become more assertive under the Biden administration. This change allows more enforcement supervisors to authorize investigations, permitting about 36 senior officials at the agency to subpoena companies and individuals for records or testimony. The SEC withdrew authority from supervisors during the Trump Administration and allowed only two officials to approve new probes, saying it would result in more consistent decisions about which tips and complaints justified investigations. The number of new investigations fell each year during the Trump administration, from 1,063 in 2016 to 827 in 2019.

The SEC’s staff can look into suspected wrongdoing without getting approval for a formal investigation. But those informal inquiries are supposed to last only 60 days before they must be closed or converted into an investigation.

At the SEC,, officials say the change will allow enforcers to move more quickly when they detect signs of fraud or misconduct. The decision “empowers the senior officers closest to the facts of the case to authorize formal orders, improving the process,” said Acting Enforcement Director Melissa R. Hodgman.

JEFFREY NEWMAN REPRESENTS WHISTLEBLOWERS NATIONWIDE. HE CAN BE REACHED AT 617-823-3217 OR AT JEFFREY.JNEWMAN1@GMAIL.COM