Odaily News The U.S. Securities and Exchange Commission now requires its lawyers to obtain senior approval before formally launching an investigation, according to two people familiar with the matter. The new requirements stipulate that law enforcement officers must obtain permission from politically appointed commissioners to issue subpoenas, request documents and compel testimony. Previously, staff had the power to independently launch formal investigations, while SEC commissioners oversaw the entire process.
The change comes after a shakeup in the SEC’s leadership, including the departures of former Chairman Gary Gensler and Democrat Jaime Lizárraga last month. President Trump named Mark Uyeda as acting chairman, and the commission currently consists of three commissioners: Uyeda, Hester Peirce, and Caroline Crenshaw.
According to Tyler Warner, a former bank consultant and current NFT market analyst, the new system will prevent “malicious attacks.” SEC commissioners will be more cautious and less likely to approve investigations without solid evidence.
On the other hand, the procedural change could carry the risk that legitimate fraud cases will be missed or delayed. “It’s too early to say whether it’s a net positive or negative, although I’d lean toward positive,” Warner added.
Under the previous administration, the SEC needed approval from two enforcement chiefs to formally launch an investigation (the source did not specify whether the commission formally voted to revoke the previous authorization), while enforcement staff could continue informal investigations without commissioner approval, including sending requests for information. [Reuters]