A Form of Lunacy Has Overtaken the SEC

March 16, 2023

A form of lunacy has overtaken the Securities and Exchange Commission. Those in charge seem to have lost any concept of how to rationally manage a finite amount of resources -- both human and otherwise. Unwilling or incapable of stopping, the SEC continues its excessive resort to rulemaking and rule-amending.

There is reach.

There is grasp.

Virtually none of the more recent rule proposals are within the SEC's reach; and, at this moment in history, none seem capable of coming within the federal regulator's grasp.

The SEC crypto agenda is not one of accomplishment but of delay and failure.

Staff morale is reported to be at historic lows.

Hardcore enforcement in furtherance of investor protection seems to be sacrificed on the altar of generating press and marketing the illusion of regulation.

On March 15th, while the markets fell nearly 2% amid a perceived banking crisis, the SEC issued four press releases about rulemaking and amending.  The SEC's focus should -- must -- be on consumer protection and going after fraudsters in court; instead, we get social media and the reallocation of lawyers and investigators to drafting proposals and cite checking. Indeed, there is magic in the air but that is little more than misdirection, smoke, and mirrors.  

SEC Proposes New Requirements to Address Cybersecurity Risks to the U.S. Securities Markets
(SEC Release / March 15, 2023)

The SEC  proposed a new cybersecurity-risks rule, form, and amendments for broker-dealers, clearing agencies, major security-based swap participants, the Municipal Securities Rulemaking Board, national securities associations, national securities exchanges, security-based swap data repositories, security-based swap dealers, and transfer agents (collectively, “Market Entities”)
https://www.sec.gov/rules/proposed/2023/34-97142.pdf . In part, the SEC Release asserts that: 

Market Entities increasingly rely on information systems to perform their functions and provide their services and thus are targets for threat actors who may seek to disrupt their functions or gain access to the data stored on the information systems for financial gain. Cybersecurity risk also can be caused by the errors of employees, service providers, or business partners. The interconnectedness of Market Entities increases the risk that a significant cybersecurity incident can simultaneously impact multiple Market Entities causing systemic harm to the U.S. securities markets.

The proposal would require all Market Entities to implement policies and procedures that are reasonably designed to address their cybersecurity risks and, at least annually, review and assess the design and effectiveness of their cybersecurity policies and procedures, including whether they reflect changes in cybersecurity risk over the time period covered by the review. The proposal — through new notification requirements applicable to all Market Entities and additional reporting requirements applicable to Market Entities other than certain types of small broker-dealers (collectively, “Covered Entities”) — would improve the Commission’s ability to obtain information about significant cybersecurity incidents affecting these entities. Further, new public disclosure requirements for Covered Entities would improve transparency about the cybersecurity risks that can cause adverse impacts to the U.S. securities markets.

SEC Reopens Comment Period for Proposed Cybersecurity Risk Management Rules and Amendments for Registered Investment Advisers and Funds
(SEC Release 
/ March 15, 2023)

Ummm, lemme see here . . . what? First, the SEC posts a Press Release (see above) announcing a new cybersecurity proposal; however, upon further reflections (belated as it is), the SEC seems to feel that it may have rushed into its first batch of cybersecurity rules/amendments because the federal regulator is now reopening the earlier comment period. As asserted in part in the SEC Release:

The Securities and Exchange Commission today reopened the comment period on proposed rules and amendments related to cybersecurity risk management and cybersecurity-related disclosure for registered investment advisers, registered investment companies, and business development companies that were proposed by the Commission on February 9, 2022. The initial comment period ended on April 11, 2022.

The reopened comment period will allow interested persons additional time to analyze the issues and prepare comments in light of other regulatory developments, including whether there would be any effects of other Commission proposals related to cybersecurity risk management and disclosure that the Commission should consider. 

SEC Proposes Changes to Reg S-P to Enhance Protection of Customer Information
(SEC Release 
/ March 15, 2023)

The SEC  proposed amendments to Regulation S-P,
https://www.sec.gov/rules/proposed/2023/34-97141.pdf which is further explained, in part, in the SEC Release:

Regulation S-P currently requires broker-dealers, investment companies, and registered investment advisers to adopt written policies and procedures for the protection of customer records and information (“safeguards rule”). Regulation S-P also requires the proper disposal of consumer report information (“disposal rule”). Today’s proposal, if adopted, would update the rule’s requirements to address the expanded use of technology and corresponding risks since the Commission originally adopted Regulation S-P in 2000.

The Commission’s proposal would require broker-dealers, investment companies, registered investment advisers, and transfer agents (collectively, “covered institutions”) to adopt written policies and procedures for an incident response program to address unauthorized access to or use of customer information. The proposed amendments would also require, with certain limited exceptions, covered institutions to provide notice to individuals whose sensitive customer information was or is reasonably likely to have been accessed or used without authorization. The proposal would require a covered institution to provide this notice as soon as practicable, but not later than 30 days after the covered institution becomes aware that an incident involving unauthorized access to or use of customer information has occurred or is reasonably likely to have occurred.

The proposed amendments would also make a number of additional changes to Regulation S-P, including:

Broadening and aligning the scope of the safeguards rule and disposal rule to cover “customer information,” a new defined term. This change would extend the protections of the safeguards and disposal rules to both nonpublic personal information that a covered institution collects about its own customers and to nonpublic personal information that a covered institution receives about customers of other financial institutions;

Extending the safeguards rule, including the proposed enhancements, to transfer agents registered with the Commission or another appropriate regulatory agency, and expanding the existing scope of the disposal rule to include transfer agents registered with another appropriate regulatory agency rather than only those registered with the Commission; and

Conforming Regulation S-P’s existing provisions relating to the delivery of an annual privacy notice for consistency with a statutory exception created by Congress in 2015.

SEC Proposes to Expand and Update Regulation SCI
(SEC Release 
/ March 15, 2023)

The SEC  proposed amendments to Regulation Systems Compliance and Integrity ("SCI")
https://www.sec.gov/rules/proposed/2023/34-97143.pdf In part the SEC Release asserts that:

[T]he proposed amendments would expand the scope of SCI entities to include registered security-based swap data repositories; all clearing agencies that are exempt from registration; and certain large broker-dealers, in particular, those that exceed a total assets threshold or a transaction activity threshold in national market system stocks, exchange-listed options contracts, US Treasury securities, or Agency securities.

The proposed amendments would also strengthen the requirements Regulation SCI imposes on SCI entities, including by requiring that an SCI entity’s policies and procedures include the maintenance of a written inventory and classification of all SCI systems and a program for life cycle management; a program to prevent the unauthorized access to such systems and information therein; and a program to manage and oversee certain third-party providers, including cloud service providers, of covered systems.

The proposed amendments would also expand the types of SCI events experienced by an SCI entity that would trigger immediate notification to the Commission, update the rule’s annual SCI review and business continuity and disaster recovery testing requirements, and update certain of the regulation’s recordkeeping provisions.

Bill Singer's Comment: More lunacy from a regulator unaware of the day's headlines and unaware of the depleted state of morale within its ranks. Unable to clean its Augean stable of stale cases, the SEC proposed new rules and rule amendments. Inexplicably, sadly, foolishly, and incompetently, the SEC adds more manure to its pile. No -- I am not arguing against promulgating cybersecurity protections, or reopening what now seems to have been an earlier, premature round of cybersecurity-protection proposals, or enhancing Reg S-P, or updating Reg SCI; however, at some point, an adult must enter the kindergarten and insist that the children take a nap. There is no sense of priority at the SEC. There is no sense of time or place. There is just an unstopped effluent of press releases, podcasts, videos, social media posts, and whatever else is in the arsenal of misguided self promotion. Indeed, at times, enough is, in fact, enough. 

The Tally as of March 16, 2023

As of March 16, 2023, if we just count the number of reported Proposed Rules on the annual "SEC Proposed Rules" webpages, we come up with the following;  


MONTHS 2016 2017 2018 2019 2020 2021 2022 2023
January  2 0 0 0 2 0 4 2
February 2 2 0 2 1 0 7 2
March 0 0 2 1 1 0 5 4
April 0 1 3 0 1 1 1  
May 1 0 2 3 0 0 4  
June 3 1 3 0 0 0 1  
July 2 0 1 1 1 0 2  
August 2 0 0 1 3 0 2  
September 3 1 3 3 1 1 1  
October 1 0 2 3 0 1 2  
November 0 1 0 4 2 5 1  
December 0 0 3 3 1 3 5  
TOTAL 16 6 19 21 13 11 35 8









The "SEC Proposed Rules" chart above covers the years from 2016 through March 16, 2023, three Presidential administrations (two Democrats and one Republican), and pre-dates and covers the Covid pandemic. I have offered an extensive set of data so as to avoid allegations of favoritism or biased sampling. 
If we simply add up the Total Proposed Rules for the completed years of 2016 to 2022, we come up with 121; and if we divide that by the seven years at issue, we have a "mean" average of 17.29 Rule Proposals for each year. If we array the totals from smallest to largest:
the "median" average midpoint falls at 16. 
As such, be it the mean or median, the SEC proposed about 16/17 rules per year for each year from 2016 through 2022 -- and that's factoring in the outlier year of 2022, which had a whopping 35 proposals!
March 15, 2023: 8 Rules and Counting!
About 3 1/2 months into 2023, the SEC has already proposed 8 rules -- roughly half the average number of proposals for a completed year going back to 2016. And we still have nearly 8 1/2 months left in 2023!!
On March 15, 2023, apparently, not satisfied that one last straw would break the poor beast's back on one day, the SEC opted for four straws: one reopened comment period and three rule proposals:
2. SEC Proposes to Expand and Update Regulation SCI / 2023-53
When the SEC posts a Rule Proposal, that inevitably prompts a published statement from each of the sitting Commissioners and Chair. We are asked to read through unending  musings, opinions, and thoughts about nothing more than mere proposed rules. Of course, attendant to publishing a statement about all that musing, opining, and thinking is the use of staff and resources to compose the drafts, research the footnotes, edit the final product, and, then, hey, y'know, let's all pretend that the purported author actually did all the work, right? 
Talking Points(less)
Statement on Amendments to Regulation SCI

Chair Gary Gensler
Statement on the Proposed Amendments to Regulation Systems Compliance and Integrity

Commissioner Mark T. Uyeda
Statement on Enhanced Cybersecurity for Market Entities

Chair Gary Gensler
Statement on Proposed Cybersecurity Rule 10 and Form SCIR

Commissioner Hester M. Peirce
Statement on Amendments to Regulation S-P, Cybersecurity Risk Management, and Amendments to Regulation SCI

Commissioner Caroline A. Crenshaw
Statement on the Proposed Cybersecurity Risk Management Rule for Broker-Dealers, Clearing Agencies, Major Security-Based Swap Participants, the Municipal Securities Rulemaking Board, National Securities Associations, National Securities Exchanges, Securit

Commissioner Mark T. Uyeda
Protecting Investors from Cyberattacks and Enhancing Cybersecurity in U.S. Capital Markets

Commissioner Jaime Lizárraga
Statement on Amendments to Regulation S-P

Chair Gary Gensler
Statement on Regulation SP: Privacy of Consumer Financial Information and Safeguarding Customer Information

Commissioner Hester M. Peirce
Statement on the Proposed Amendments to Regulation S-P: Privacy of Consumer Financial Information and Safeguarding Customer Information Commissioner Mark T. Uyeda

As to the toll -- the waste of time and the repositioning of Staff from enforcement activities to all of this public relations nonsense -- consider Chair Gensler's personal Statements in connection with the above-cited March 15, 2023, proposals:

Chair Gensler Statement on Amendments to Regulation S-P:

I'd like to thank the members of the SEC staff who worked on this proposal, including:

      • William Birdthistle, Sarah ten Siethoff, Thoreau Bartmann, Marc Mehrespand, Taylor Evenson, Aaron Ellias, Jessica Leonardo, Rachel Kuo, and Andrew Deglin in the Division of Investment Management;
      • Haoxiang Zhu, David Saltiel, Andrea Orr, Emily Westerberg Russell, John Fahey, Devin Ryan, Edward Schellhorn, Susan Poklemba, Brice Prince, James Wintering, and Moshe Rothman in the Division of Trading and Markets;
      • Jessica Wachter, Rebecca Orban, Lauren Moore, Alexander Schiller, Maciej Szefler, Charles Woodworth in the Division of Economic and Risk Analysis;
      • Megan Barbero, Meridith Mitchell, Malou Huth, Robert Teply, Ronesha Butler, Maureen Johansen, Natalie Shioji, Alice Wang, Cathy Ahn, Kerry Dingle, Jeff Berger and Tracey Hardin in the Office of the General Counsel;
      • James Maclean, Carrie O’Brien, Joseph Murphy, Alexis Hall, Colin Ray, Eric Garvey, Tina Barry, Karen Stevenson, Chris Carpenter, Sal Montemarano, and Keith Kanyan in the Division of Examinations; and
      • Christine Jeon, Margaret McGuire, Gregory Smolar, Amy Flaherty Hartman, and Chris Carpenter in the Division of Enforcement.

Chair Gensler Statement on Enhanced Cybersecurity for Market Entities

I’d like to thank the members of the SEC staff who worked on this proposal, including:

      • Randall Roy, Nina Kostyukovsky, Haoxiang Zhu, David Saltiel, Andrea Orr, Michael Macchiaroli, Thomas McGowan, Ray Lombardo, Matthew Lee, Stephanie Park, Kevin Schopp, Moshe Rothman, Carol McGee, John Guidroz, Russell Mancuso, Michael E. Coe, Leah Mesfin, Tyler Raimo, Cate Whiting, Elizabeth De boyrie, Heidi Pilpel, David Liu, Erika Berg, Katriana Roh, David Hsu, Rob Hegarty, Roman Ivanchenko, Joshua Nimmo, Devin Ryan, James Wintering, Susan Pokembla, Ed Schellhorn, Roni Bergoffen, Laura Compton, Jennifer Colihan, and William Miller in the Division of Trading and Markets;
      • Greg Price, Jessica Wachter, Oliver Richard, Juan Echeverri, Wei Liu, Daniel Bresler, Michael Willis, Julie Marlowe, Greg Scopino, Parhaum Hamidi, Lauren Moore, Robert Girouard, Carolina Schulte, Michael Davis, and Jill Henderson in the Division of Economic and Risk Analysis;
      • Ronesha Butler, Maureen Johansen, David Mendel, Megan Barbero, Meridith Mitchell, Malou Huth, and Robert Teply in the Office of the General Counsel;
      • David Hirsch and Diana Tani in the Division of Enforcement;
      • Keith Cassidy, Dan Dewaal, Alexis Hall, Joseph Murphy, and Carrie O’Brien in the Division of Examinations;
      • Sarah ten Siethoff, Melissa Roverts Harke, David Joire, Chris Staley, and Rachel Kuo in the Division of Investment Management;
      • Jane Patterson and Todd Canali in the EDGAR Business Office;
      • Jon Balcom, Steve Benham, and Kevin Baumann in the Office of International Affairs;
      • James Scobey in the Office of Information Technology;
      • Dave Sanchez, Adam Wendell, and Adam Allogramento in the Office of Municipal Securities; and
      • Valerie Szczepanik in the Office of the Strategic Hub for Innovation and Financial Technology.

 Chair Gensler Statement on Amendments to Regulation SCI

I’d like to thank the members of the SEC staff who worked on this proposal, including:

      • Heidi Pilpel, Haoxiang Zhu, David Saltiel, Andrea Orr, David Shillman, David Liu, Sara Hawkins, Gita Subramaniam, Josh Nimmo, An Phan, Matthew Lee, Stephanie Park, Roman Ivanchenko, Richard Schwinn, Jesse Brady, Patrick Norton, Alex Jadin, Arun Manoharan, Mark Donohue, Thomas McGowan, Randall Roy, Nina Kostyukovsky, Roni Bergoffen, Marilyn Parker, Jennifer Colihan, Will Miller, Tyler Raimo, Michael Gaw, Erika Berg, David Hsu, and Leah Drennan in the Division of Trading and Markets;
      • Lauren Moore, Wei Liu, Ardith Spence, Jessica Wachter, Richard Oliver, Chyhe Becker, Rooholah Hadadi, Daniel Bresler, Robert Girouard, Jeorge Young, Charles Woodworth, and Yoon-ho Alex Lee in the Division of Economic and Risk Analysis;
      • Maureen Johansen, Ronesha Butler, Megan Barbero, Meridith Mitchell, Malou Huth, Robert Teply, and David Mendel in the Office of the General Counsel;
      • Keith Cassidy, Dan Dewaal, Alexis Hall, Joseph Murphy, Carrie O’Brien, and Michael Hershaft in the Division of Examinations;
      • Lory Stone and Ben Brutlag in the Division of Enforcement;
      • Valerie Szczepanik in Office of the Strategic Hub for Innovation and Financial Technology;
      • Dave Sanchez in the Office of Municipal Securities; and
      • Mark Jacoby in the Office of the Chief Accountant.
The Human Tally (and Toll)
Lets start taking names and adding up the numbers. In Chair Gensler's:

  • Regulation S-P Statement, he thanked 54 Staff members
  • Regulation SCI Statement, he thanked 61 Staff members
  • Enhanced Cybersecurity Statement, he thanked 80 Staff members
Add up the numbers of Staff involved in the three rule proposals: 195 Staff members. 
Yes, I know that I'm double- and triple-counting some folks but since they were assigned among three separate proposals, I think that's fair and appropriate. As I see it, those 195 Staff members were not preparing for trial. Not at trial. Not clearing up the back-log of whistleblower tips or processing whistleblowers' claims for awards. No, those 195 Staff were engaged in what likely was little more than the make-work and make-waste
As a former regulatory lawyer, I know how the unavailability of 195 Staffers actually plays out. You're preparing a Motion or you're getting ready for a hearing, and, what the hell, that "okay" I need from some higher-up is still stuck somewhere on some idiot's desk in Washington. Where is the approval to hire the expert? Where is the signature on the document that needs to be filed by today? What happened to the questions that I sent to that other Division. 
And then the answers -- the excuses -- start to flood in. 
Sorry, Mr. Smith was tied up on the third Draft of the Rule Proposal; or Ms. Smith was assigned to vet the citations; or the Director couldn't get to your case because he was tasked (yeah, don't you love that word "tasked") with checking the accuracy of several footnotes. 
If you win the case, all those folks who didn't get back to you will take credit for your hard work; and if you lose, those same folks will second-guess you and blame you. 
Adding insult to injury, at the end of the year, when they give out those awards and commendations, the folks who never found the time to get back to you are featured in the press releases and you're told that "maybe next year" your nomination for the faux wood plaque will get approved. 
SEC OIG Letter
The SEC's Office of Inspector General ("OIG") transmitted on September 29, 2022, a letter to Chair Gensler: " SUBJECT: Final Management Letter: Changes to the Internal Review Process for Proposed Rules May Impact the Office of the Advocate for Small Business Capital Formation and the Office of the Investor Advocate
OIG raised its concerns about the SEC's rulemaking process and, in pertinent part, asserted that [Ed: Office of the Advocate for Small Business Capital Formation ("OASB"); the SEC's Office of the Investor Advocate ("OIAD"); and footnotes omitted]:
OASB and OIAD acknowledged that the Office of the Chair has the authority to direct the agency's rulemaking process; however, the opportunity to comment on 30-day and subsequent draft rules provides these offices with meaningful opportunities to carry out their office functions early in the process. Although OASB personnel raised concerns about the temporary change in the rulemaking process, they told us that they were nonetheless able to review, as warranted, all rule proposals likely to have a significant impact on small businesses and their investors. OIAD personnel informed us that, during the time the process change was in effect, they received two fatal flaw drafts (but not the corresponding 30-day drafts); they provided comments to the Commission on one of the proposed rules and determined that no comments were needed for the other. However, personnel reported to us that, had the change in the rulemaking process remained in effect, it would have significantly shortened the review and comment period and rendered OIAD's involvement in rulemaking largely ineffective because fatal flaw drafts are typically provided as a courtesy and only comments on perceived fatal errors are accepted at that stage. Generally, we concluded that changes to the SEC's rulemaking process, particularly without notice to the offices likely to be impacted, may unintentionally limit the ability of those offices to carry out their functions, and could hinder effective collaboration and information sharing across the agency.
Notably, the SEC's strategic plan identifies the teamwork of the SEC's staff and its leaders, along with other elements, as the "foundation" of the agency, and acknowledges that "effective and efficient partnership of staff across the agency" is critical to the SEC's ability to carry out its mission. As reported in our October 2021 statement on the SEC's management and performance challenges, opportunities exist to strengthen communication and coordination across divisions and offices. Specifically, we stated, "management's early attention, as needed in response to this emerging theme can be instrumental to (1) prevent the development of systematic and significant challenges, such as potential siloing or duplicative functioning, in the future, (2) continue positive trends in employees views on collaboration, and (3) achieve the goals established in the SEC's most recent strategic plan." Furthermore, federal internal control standards state that effective information and communication are vital for an entity to achieve its objectives, and management should internally communicate the necessary quality information to enable personnel to perform key roles in achieving objectives.
at Page 4 of the September 29, 2022 OIG Letter
The SEC OIG Cites Difficulties Managing Resources Because of Increased Rulemaking
Shortly after the transmittal of its September 29th letter to Chair Gensler, OIG published "The Inspector General's Statement on the SEC's Management and Performance Challenges, October 2022." https://www.sec.gov/files/inspector-generals-statement-sec-mgmt-and-perf-challenges-october-2022.pdf  The October OIG Report asserts this disconcerting fact:
We met with managers from the SEC's divisions of Trading and Markets, Investment Management, Corporation Finance, and Economic and Risk Analysis, some of whom raised concerns about increased risks and difficulties managing resources and other mission-related work because of the increase in the SEC's rulemaking activities. For example, some reported an overall increase in attrition (discussed further on page 21 of this document) and difficulties hiring individuals with rulemaking experience. In the interim, managers reported relying on detailees, in some cases with little or no experience in rulemaking. Others told us that they may have not received as much feedback during the rulemaking process, either as a result of shortened timelines during the drafting process or because of shortened public comment periods. Although no one we met with identified errors that had been made, some believed that the more aggressive agenda-particularly as it relates to high-profile rules that significantly impact external stakeholders-potentially (1) limits the time available for staff research and analysis, and (2) increases litigation risk. Finally, some managers noted that fewer resources have been available to complete other mission-related work, as rulemaking teams have borrowed staff from other organizational areas to assist with rulemaking activities. 
at Page 3 of the 2022 SEC OIG Report
Despite management's commitment to cross-functional collaboration and communication, personnel we met with (including those from the Division of Economic and Risk Analysis, the Division of Enforcement [Enforcement], and the Office of the General Counsel, among others) identified coordination and communication as a persistent challenge in the rulemaking process, particularly given potential overlaps in jurisdiction and differences in opinions. We reported on such challenges in a management letter issued in September 2022. .  .
at Page 4 of the 2022 SEC OIG Report
Highest Attrition Rate in 10 Years
The SEC's overly-aggressive rule proposal effort has not merely fomented unrest and dissent in the ranks:
[T]he SEC seems to be facing challenges in its retention efforts. As the figures below demonstrate, the SEC has seen a significant increase in attrition over the last few years, from 3.8 percent in FY 2020 to an estimated 6.4 percent in FY 2022 (as of September 20, 2022) -- the highest attrition rate in 10 years. Most concerning is the increased attrition in Senior Officer and attorney positions, expected to be about 20.8 percent and about 8.4 percent for FY 2022, respectively.
at Page 21 of the 2022 SEC OIG Report
See, for example:

"SEC Announces Departure of Chief of Staff Prashant Yerramalli and Appointment of Amanda Fischer to the Role" (SEC Release / Nov. 7, 2022)

"SEC Announces Departure of Dan Berkovitz; Megan Barbero Named General Counsel" (SEC Release / December 22, 2022

"SEC Announces Departure of Renee Jones; Erik Gerding Named Director of Division of Corporation Finance" (SEC Release / January 2023)
2022 Senate Query: Why Is SEC Staff Quitting? 
In 2022, six Senate Republicans on the Senate Banking Committee [Thom Tillis from North Carolina, Mike Crapo from Idaho, Tim Scott from South Carolina, Michael Rounds from South Dakota, Bill Hagerty from Tennessee and Steve Daines from Montana} sent a private letter to SEC Chair Gensler questioning the numbers of rule proposals and reports of SEC Staff discontent; see, "Senate Republicans want the SEC to explain why staff are quitting" (Reuters by Neil Mackenzie / updated October 31, 2022)
https://www.reuters.com/world/us/senate-republicans-want-sec-explain-why-staff-are-quitting-2022-10-30/. In part, the Reuters story notes that the letter:
references a public Oct. 13 report posted on the SEC's website from the Office of the Inspector General, the SEC's own internal watchdog, detailing staff attrition and reports of discontent.
Republicans want Gensler to explain how he will address the concerns in the report and also to allow more time for industry feedback on the new rules.
Failing to Manage
Indeed, there are many fine, talented men and women in the managerial ranks of the SEC. Some reached those lofty heights through hard work; others, not so much -- they knew someone who knew someone; or they knew someone who was owed a favor; or their father/mother donated some big bucks to someone who pushed aside someone else's candidacy. You have been at the SEC for some 15 years and know what you're doing and even have some ideas for improving things but you know that you were never given a fair consideration for that senior position. Fact is, everyone knew the fix was in. We in the ranks just don't get those posts. They go to someone from the outside. In some cases, that outsider doesn't have a clue. 
A lack of managers with effective managerial skills is not just an SEC thing. It is a failure that impacts governments at all levels. It is corrosive and impervious to remediation. It is a cancer. Which explains why the biggest problem at places like the SEC is not getting talent but, in contradistinction, getting skilled managers. Great litigators are not necessarily great managers. Gifted statisticians don't always know how to write compelling reports. Folks who deserve promotion are often kept in their place by superiors with little knowledge of the field that they were put in charge of.
Putt-ing Along
I commend to your consideration these two bedrock principles of organizations:
Putt's Law: Technology is dominated by two types of people: those who understand what they do not manage and those who manage what they do not understand.
Putt's Corollary: Every technical hierarchy, in time, develops a competence inversion.
I'm comfortable substituting "Wall Street Regulation" for "Technology" and retrofitting Putt's Law and Corollary. The SEC has competent, skilled Staff in the trenches and assigned to handle litigation and market oversight; however, those who are managing the skilled Staff don't appear to understand what they're managing or how to manage effectively. In the end, if you know what you're doing at the SEC, you will never rise into the upper echelons of management; however, in an inversion of competence, if you don't know what you're doing at the SEC, then you will be promoted so that you manage what you don't understand and manage those who do. 
SEC Among Best Places to Work
When I first entered the securities industry in 1982, the SEC was always considered among the best places to work. Frankly, the federal regulator boasts as much on its webpage titled "SEC Again Ranks Among Best Places to Work" (September 21, 2021)
According to the 2020 Best Places to Work in the Federal Government rankings, which are compiled by the nonpartisan, nonprofit Partnership for Public Service, the SEC ranked fourth out of 25 mid-size agencies, just 1.5 points out of the third spot and less than four points away from the top of the rankings.
The SEC's "engagement score" was 85.7, well above the government-wide average of 69.0.
"This honor is a testament to the SEC staff's teamwork, dedication, and service to American investors," said SEC Chair Gary Gensler. "They are the reason the SEC is one of the best places to work. I congratulate them on this achievement and thank them for their work on behalf of the public."
The SEC finished first among all mid-size agencies in the category of "Work-Life Balance" that measures the extent to which employees consider their workloads reasonable and feasible, and managers support a balance between work and life.
The SEC also had three divisions/offices rank among the top 10 in government for the "agency subcomponents" category, the most by any agency in government. The SEC's Office of Support Operations ranked fourth with a score of 91.3, and the Division of Investment Management and the Office of General Counsel ranked sixth and seventh, respectively.
But that was then and this is the now of 2023, and the 2021 rankings declined. https://bestplacestowork.org/rankings/detail/?c=SE00
For starters, the SEC "Rank" for Engagement and Satisfaction fell to 5th out 25 with a Score decline from 2020's 85.7 to 2021's 82. Overall, the SEC remains highly rated among government employers but past glory often becomes faded glory. Not disclosed in the statistics are the ratings for 2022 and the current morale in 2023. 
Chair Gensler cracks the whip and demands the most out of the horses pulling the SEC stagecoach. Some may find that admirable. At some point, however, when a manager sets unrealistic and unattainable goals, when that manager fails to actually accomplish anything of significance, the risk is that for all the perception of effort, the result is that you have merely run your team into the ground.  

A Form Of Lunacy Has Overtaken The SEC (BrokeAndBroker.com Blog)

FINRA's Travesty of a Transamerica Settlement (BrokeAndBroker.com Blog)

Morgan Stanley Granted TRO Against Advisor Who Joined LPL / After a whirlwind two days of motion-slinging, the parties agreed to arbitration.(Financial Advisor IQ by Glenn Koch)

Joint Statement by Department of the Treasury, Board of Governors of the Federal Reserve System, and Federal Deposit Insurance Corporation (March 12, 2023)

JOIN the Financial Professionals Coalition, Ltd

4Cir Affirms Denial of Motion to Vacate FINRA Arbitration Award
Kayvan Karoon; KS Capital Management, Inc., Appellants, v. National Securities Corporation (4 Cir Opinion)

Litigation funder Burford sues Sysco over $140 mln antitrust investment (Reuters by Mike Scarcella)

RIDING OFF INTO THE SUNSET / Alex Rosenberg says goodbye to Citywire RIA / Here’s what he’s learned about the RIA business over the past three years.


Financial Manager Sentenced to 21 Months Imprisonment for Embezzling Over $200,000 From Employer (DOJ Release)

Sterling Bancorp, Inc. to Plead Guilty to $69M Securities Fraud (DOJ Release)

Justice Department Investigation Leads to Takedown of Darknet Cryptocurrency Mixer that Processed Over $3 Billion of Unlawful Transactions / Vietnamese Operator of ChipMixer Charged with Laundering Money for Ransomware Perpetrators, Darknet Markets, Fraudsters, and State-Sponsored (DOJ Release)

Ho Wan Kwok, a/k/a "Miles Guo," Arrested For Orchestrating Over $1 Billion Dollar Fraud Conspiracy / Over $630 Million of Alleged Fraud Proceeds Seized by U.S. Government (DOJ Release)

Arizona Licensed Insurance Agent Charged with Scheme to Defraud Elderly Clients (DOJ Release)

Two Men Plead Guilty to $1.3 Million Penny-Stock Scheme (DOJ Release)

Miami Man Charged for Running Fraudulent Cryptocurrency and Stock Investment Scheme (DOJ Release)


SEC Charges Cannabis Company American Patriot Brands, CEO, and Others with Fraud (SEC Release)

SEC Charges Darius Karpavicius in $4 Million Offering Fraud for Operating Tbo Capital Group and Gray Capital Group (SEC Release)

SEC Proposes New Requirements to Address Cybersecurity Risks to the U.S. Securities Markets (SEC Release)

SEC Reopens Comment Period for Proposed Cybersecurity Risk Management Rules and Amendments for Registered Investment Advisers and Funds (SEC Release)

SEC Proposes Changes to Reg S-P to Enhance Protection of Customer Information (SEC Release)

SEC Proposes to Expand and Update Regulation SCI (SEC Release)

SEC Charges Recidivist with Stealing $5.2 Million from Investors (SEC Release)

SEC Charges Exiled Chinese Businessman Miles Guo and His Financial Advisor William Je in $850 Million Fraud Scheme (SEC Release)

Court Issues Amended Final Judgment Against Penny Stock "Mailman" and His Two Companies (SEC Release)

SEC Charges IT Services Provider DXC Technology Co. for Misleading Non-GAAP Disclosures (SEC Release)

SEC Charges California Fuel Business Operator with Defrauding Retail Investors and Misappropriating Funds (SEC Release)

SEC Obtains Judgment Against Individual in Multi-Million Dollar Securities Offering Fraud (SEC Release)

SEC Charges Water Treatment Company and Former Executive with Accounting Violations (SEC Release)

SEC Charges Investment Adviser for Failing to Adopt New Compliance Policies for Clients and Seek Best Execution Despite Prior Notice of Deficiencies (SEC Release)

Statement by SEC Chair Gary Gensler on Current Market Events

March 15, 2023, Statements by SEC Chair and Commissioners


CFTC Statement on Swaps Rules Implicated in Recent Bank Failures


FINRA Fines and Suspends Rep for Improper Removal of Customer Information In Anticipation of Joining New Firm
In the Matter of Brendan Ercole, Respondent (FINRA AWC)