Securities and Exchange Commission (SEC) Chairman Gary Gensler gave a warning to securities lawyers that the watchdog is going after all forms of misconduct, and will crackdown on those cryptocurrency issuers and market participants attempting to sidestep legislation or get in the way of SEC probes.
Speaking on Thursday (Nov. 4) to the Securities Enforcement Forum, Gensler said that issuers and entities that handle trades will be under closer scrutiny, and that the agency would turn its attention to the economics and purpose of a particular financial instrument.
Less focus would be placed on the technology differences between those instruments, Gensler said in his remarks.
“We will continue to pursue misconduct wherever we find it,” Gensler said to the virtual gathering of white-collar defense lawyers. “That will include hard cases, the novel cases, and, yes, the high-impact cases — whether in special purpose acquisition companies, cyber, crypto, or private funds, whether accounting fraud insider trading, or recordkeeping violations.
“Make no mistake: regardless of the label or purported mission, we will be looking at the economic realities of a given product or arrangement to determine whether it complies with the securities laws,” Gensler said.
The SEC boss also mentioned the introduction of a new policy, which would task staff lawyers with quickly resolving enforcement cases and reducing meetings with “entities that want to discuss arguments.” Gensler also warned that defense attorneys should avoid deciding to “burn the clock,” which makes it harder for SEC lawyers to gather evidence.
“So, if you request a meeting, please make it targeted,” Gensler said. “Don’t expect multiple, repetitive meetings on the same issues.”
Gensler’s speech comes as he moves aggressively toward new mandates concerning corporate disclosures of climate risk and labor practices, as well as market structure and stock buybacks.