"SEC to revise enforcement method… 'Notify companies before enforcement'"

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Summary

The U.S. Securities and Exchange Commission (SEC) said it will improve enforcement procedures by giving companies advance notice before initiating sanctions.
The SEC said it will correct its past unreasonable operating methods to increase predictability and move away from a sanctions-focused approach.
It said that in the FTX bankruptcy the U.S. investor protection system contributed to the return of funds.

The U.S. Securities and Exchange Commission (SEC) is expected to improve its enforcement procedures by notifying target companies before initiating sanctions.

On the 15th (local time), SEC Commissioner Paul Atkins said in an interview with the Financial Times, "Going forward, the SEC will always give prior notice to companies before taking enforcement actions," and added, "The SEC was established to catch fraudsters, not companies."

He criticized the SEC's past operating methods as unreasonable. Commissioner Atkins said, "In recent years the SEC did not follow precedent and disregarded predictability. It was like firing a gun and asking questions afterward without warning," and said, "We will move away from operating in a sanctions-focused way like the Biden administration."

He also mentioned the FTX bankruptcy. He said, "Although many investors suffered losses in this case, U.S. derivative funds were safely protected and returned to customers," adding, "It is a good example of how the U.S. investor protection system can be helpful."