SEC chair says big fines key to attacking wrongdoing

Thu Sep 26, 2013 4:24pm EDT
 
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By Sarah N. Lynch and Aruna Viswanatha

WASHINGTON (Reuters) - The head of the Securities and Exchange Commission warned that her agency will aggressively use its powers to fine wrongdoers and is seeking other creative ways to hold companies and individuals accountable for their misdeeds.

"Meaningful monetary penalties - whether against companies or individuals - play a very important role in a strong enforcement program," SEC Chair Mary Jo White said in a speech in Chicago on Thursday.

"They make companies and the industry sit up and take notice of what our expectations are and how vigorously we will pursue wrongdoing," she said.

The comments mark White's second major enforcement policy shift since she took over the helm of the SEC in April.

White, a former federal prosecutor, has already sought to add teeth to SEC settlements by requiring defendants in certain cases to admit to wrongdoing, rather than settle without admitting or denying the charges.

White's public remarks on Thursday come as SEC staff and commissioners in recent weeks have reignited a long-standing debate about the merits of mega fines against publicly traded companies, according to several people familiar with the matter.

Critics have long held that sizeable fines against public companies unduly punish ordinary shareholders, while proponents argue they carry a strong deterrent effect.

The closed-door debate was evident in the SEC's settlement last week with JPMorgan Chase & Co over the "London Whale" trades.   Continued...

 
The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst