On February 9, Acting SEC Chair Lee announced she was restoring the delegated authority of Enforcement Division senior officials to issue subpoenas to compel document production and sworn testimony without the need of a Formal Order of Investigation by the full Commission.
Until 2009, the SEC could only issue compulsory processes (for document production and testimony) under a Formal Order of Investigation issued by the Commission. In 2009, however, then-Chair Mary Shapiro delegated that authority to the Director of Enforcement for a trial period of one year. The Final Order, No. 34-60448 (Aug. 11, 2009) is here. See also 17 C.F.R. § 202.5(a). The Commission’s enabling statute also gives the Commission authority to delegate some authority, so thereafter, sub-delegation of the Formal-Order authority to other senior Enforcement Division officers became the norm.
In 2017, and as part of then-President Trump’s regulatory rollback, Acting Commission Chair Piwowar, revoked that delegated authority, once again requiring full Commission approval of Formal Orders of Investigation. Elizabeth Warren and three other Democratic Senators complained, but the SEC’s Office of Inspector General concluded the move was not inappropriate. That Report is here.
So following President Biden’s inauguration, the shoe is on the other foot.
Acting Chair Lee’s Statement is here.
PartnerTom Potter is a Partner in the firm's Nashville office, and his practice focuses on securities, corporate disputes, and appellate litigation. Tom has over 35 years of experience representing business interests.
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