SEC chair says agency prepared for increase in trials after policy change

WASHINGTON Thu Nov 14, 2013 7:17pm EST

Related Topics

WASHINGTON Nov 14 (Reuters) - The top U.S. securities regulator said on Thursday her agency welcomed the possibility of more cases going to trial following a policy change that could require some defendants seeking settlements to admit to wrongdoing.

The head of the Securities and Exchange Commission, Mary Jo White, said its trial lawyers "are ready to go up against the best of the white-collar defense bar."

"Our new approach could lead to more trials and I welcome that possibility," said White, a former federal prosecutor who has made tough enforcement a top priority since she assumed the chairmanship of the agency in April.

The number of trials U.S. authorities brought over the past decade had decreased dramatically , White said, adding she hoped to reverse that trend.

White broke from the SEC's longtime practice of allowing defendants to settle cases without admitting or denying charges, saying the SEC would seek to extract admissions if the circumstances were right.

On Thursday, during a lecture delivered at a U.S. courthouse in Washington, she said the SEC could garner such admissions only if it could credibly threaten to go to trial.

The agency has since forced JPMorgan Chase & Co to admit to problems in how it responded to the "London Whale" multibillion dollar trading loss. It also required hedge fund manager Philip Falcone to admit he improperly borrowed money from one of his funds and cut favorable side deals with certain large investors without disclosing them to other investors.

White has since announced other changes to the agency's enforcement policies.

In September, White said the SEC planned to step up efforts to bring charges against individuals and would not shy away from seeking large penalties against executives and companies.

Last month, she said her agency would also police small infractions in order to deter more serious wrongdoing and specifically look at misconduct by auditors.

(Reporting by Aruna Viswanatha; Editing by Peter Cooney)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.