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New SEC Commissioner Reveals Reason She Votes Against Enforcement

May 15, 2018

New SEC commissioner Hester Peirce is more likely to vote against enforcement recommendations because she believes the agency’s goal should not be “to investigate for the sake of investigating,” according to InvestmentNews.

Peirce, a Republican commissioner who joined the SEC earlier this year, votes against enforcement 15% of the time, which is higher than her fellow commissioners, according to a Bloomberg Law report cited by the publication. She is particularly wary of SEC actions that suggest “rulemaking by enforcement,” and lead to prolonged investigations, limit attorney-client privilege, and enforcement actions that push the bounds of the SEC’s authority, she said Friday at the Rocky Mountain Securities Conference in Denver, InvestmentNews writes.

“While following the 'broken windows' approach, perhaps the SEC should have changed its name to the 'Sanctions' and Exchange Commission, because it acted like a branch of the U.S. Attorney's Office for the Southern District of New York,” Peirce said, according to the publication.

Former SEC chairwoman Mary Jo White was behind the commission’s broken-windows approach, InvestmentNews writes. But Peirce said that approach has changed since Jay Clayton took over as chairman of the SEC last May, according to the publication.


The regulator is now more focused on “enforcement actions with the biggest impact” that protect capital markets, according to Peirce, InvestmentNews writes. Nonetheless, Peirce still votes “no” more often than the other four commissioners, according to the publication.

By Alex Padalka
  • To read the InvestmentNews article cited in this story, click here.