Bill Singer's CommentAn excerpt from Commissioner Aguilar's speech:Enforcement of SRO ResponsibilitiesAs to future enforcement priorities, I expect that the Commission will continue to take a tougher stance against SROs that do not faithfully discharge their primary duties as regulators of the marketplace. SROs play a vital role in our markets, but it has been well-recognized that SROs have had inherent conflicts of interest between their regulatory responsibilities and their business functions - and, over the years, we have seen too many instances of SROs favoring their business interests over their regulatory obligations.The Commission must be prepared to exercise fully its oversight over SROs. To that end, I have been supportive of the Commission's renewed focus on holding SROs accountable for failing to fulfill their legal and regulatory obligations - that is particularly true of stock and option exchanges.  It may surprise you to know that prior to September 2012, when we imposed a $5 million penalty against the New York Stock Exchange, the Commission had never imposed a financial penalty against an exchange. Since then, we have imposed a $10 million penalty against NASDAQ and a $6 million penalty against the Chicago Board Options Exchange.Exchanges fulfill an important role in our capital markets, and their failures undermine investor confidence in our markets and regulatory structure. As such, the Commission must continue to hold them accountable when they do not live up to their primary duties as regulators.For far too long, the Commission could have done more in its oversight of exchanges and other SROs. I am hopeful that those days are over.
An excerpt from Commissioner Aguilar's speech:
Admissions in SEC SettlementsA robust Enforcement program also requires that defendants be held accountable for their actions and that they be required to admit publicly to their wrongdoing whenever appropriate. In the past, I have expressed concerns about the SEC's "neither admit nor deny" policy, and have had particular concerns about the practice of defendants entering into such settlements and subsequently issuing a press release disclaiming the alleged misconduct and/or claiming that regulators had overreached. A month after I first publicly expressed these concerns, Judge Rakoff cited to my speech in an opinion in which he questioned the SEC's "neither admit nor deny" policy.While we frequently obtain through settlement all the monetary and injunctive relief we are likely to obtain in litigation, when we settle on a "neither admit nor deny" basis, the public is denied a finding, either by a fact finder or by the defendant's own admission, that the defendant engaged in bad conduct.After many years of settling cases on a "neither admit nor deny" basis, the SEC will now require admissions in certain of its settlements. This is a positive change - which, among other things, brings our settlement policy more in line with the policies of our criminal counterparts.Under the new approach, the SEC will require admissions when it is in the public interest to do so. In particular, admissions may be appropriate in cases where a large number of investors were harmed or put at risk, or where defendants engage in egregious misconduct or unlawfully obstruct the Commission's investigative process. Requiring admissions in these cases will appropriately sanction defendants for their misconduct, and will go a long way toward enhancing the deterrence message of our settlements.In just the past few months, we have already seen this new approach being applied at the SEC. I expect that as we continue to develop experience under the new policy, the admissions that we will require in the future will be stronger. For example, the focus should go beyond having defendants only admitting facts, but also accepting fault for their misconduct, and admitting to having violated specific provisions of the law.Requiring defendants to make strong admissions of misconduct may make it more difficult to settle certain cases, and, as a result, for this approach to be effective we must be ready, willing, and able to go to trial.While going to trial is always an option, it remains infrequent at the SEC. The SEC currently settles approximately 98% of its Enforcement cases and, in 2012, we went to trial in only 22 out of the 734 cases we brought. However, a robust and effective Enforcement program requires us to take risks, especially in programmatically important cases. If necessary, the SEC must be willing to litigate and go to trial. A legitimate threat of litigation should also serve to increase the SEC's ability to obtain stronger settlements.