SEC, CFTC Leaders Predict Shifting Priorities, Penalty Policies

The Securities and Exchange Commission and the Commodity Futures Trading Commission are expecting new leadership put in place by the Trump administration to usher in different enforcement priorities and a shift in how firms and individuals pay fines.

“Penalties — remedies in general, but penalties included — are an area where I do think it’s likely we’ll see changes,” Sam Waldon, acting director of the SEC’s enforcement division, said at an industry conference in Austin Monday.

Penalties won’t be lower in every case, but the SEC’s process to determine punishments will be different, he said.

“With this commission, we’re going to have to show our work and we’re going to have to be able to point back to the legal basis for how we got to a penalty — which is always the case,” Waldon said. “But I think we’re probably going to have to do more.”

Waldon referenced the SEC’s 2006 policy statement about its approach to enforcement penalties, which says the agency needs to be careful not to impose penalties that ultimately punish company shareholders. President Trump’s pick to lead the SEC, Paul Atkins, who was a commissioner at the time and signed off on that directive, has frequently spoken out against large corporate penalties.