Monday, May 24, 2021

In first public remarks since confirmation, Gensler emphasizes individual accountability in enforcement

By John Filar Atwood

SEC Chair Gary Gensler said that under his watch individual accountability will be an important part of the enforcement agenda, with the agency pursuing bars and similar relief, where appropriate. In remarks at the 2021 FINRA annual conference, Gensler said the SEC will work to ensure that bad actors are not tampering with the savings of working families, and to that end will enforce the rules aggressively and consistently.

He indicated that he expects the kinds of cases the SEC pursues to include deceptive conduct by private funds, offering or accounting frauds, insider trading, market manipulation, and failures to act in retail customers’ best interests. The enforcement division also will act on reporting violations, best execution and fiduciary violations, and any other form of misconduct, he added.

Gensler said that he views the SEC and FINRA as "fellow cops on the beat." He expects both regulators to stay abreast of evolving technology, and to bring cases that touch on issues such as crypto, cyber, and fintech.

Sprit of the law. In his comments, Gensler also urged securities practitioners to operate within the spirit of the law. In his view, pushing against the edge of a rule or searching for some ambiguity in the text or a footnote may not be consistent with the law and its purpose.

There is a reason that the Securities Act of 1933 was called the Truth in Securities Law, he noted. Telling the truth matters, and practitioners should be mindful of that as they work to protect investors.

Gensler also emphasized some of the issues that will be at the heart of the SEC’s policy agenda, as articulated in his testimony before Congress a few weeks ago. Those include equity market structure, gamification, and market transparency. Also, at the forefront will be crypto, climate risk disclosure, and human capital disclosure, he said.