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Sen. Elizabeth Warren takes aim at SEC settlement protocol


A letter from Sen. Elizabeth Warren, D-Mass., to U.S. Securities and Exchange Commission Chair Mary Jo White criticizes Ms. White's job as a regulator, including charging she has not insisted on enough admissions of wrongdoing before permitting firms to settle cases.

But Ms. White has fired back, defending the SEC's implementation of the policy.

Some observers say the Warren letter will encourage the SEC to continue, and perhaps increase, its policy of demanding admissions.

Sen. Warren criticizes Ms. White on several issues in her 13-page June 2 letter. With respect to admissions of wrongdoing, she states that as of Sept. 24, 2014, SEC had required admissions of guilt in 19 of 520 settlements, or less than 4%.

She adds that in 11 of the 19, the SEC “required only a broad admission of facts specified by the SEC rather than requiring that these firms admit to violations of specific securities laws.”

In her July 10 response, Ms. White states that the “settlement protocol was and continues to be a critical tool in an effective enforcement regime because the practice allows us to obtain significant sanctions against securities law violators,” among other things.

“Our record implementing the new admissions policy has been strong, and the protocol continues to evolve and grow,” Ms. White said.

She also updates Sen. Warren's data, stating there have been 26 admissions, comprising 15 individuals and 25 entities, based on the facts and “the wrongdoing committed under federal law.”

“Going forward, I anticipate that we will, in appropriate cases, continue to press wrongdoers to publicly account for their misconduct through admissions, while still carefully balancing the need to achieve swift and certain results and preserve agency resources,” Ms. White said in the letter.

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