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SEC enforcement ebbs in 2017

November 20, 2017, Compliance Reporter

David Kornblau is quoted in a Compliance Reporter article regarding the SEC's annual enforcement report for 2017. According to Kornblau, the report showed a decrease in enforcement actions compared to the prior year, as the industry expects a downshift in regulation by the agency under new SEC Chair Jay Clayton. “My sense is that the overall level of new enforcement activity has decreased in comparison to prior years," says Kornblau. He notes that given Clayton didn’t take the reins of the SEC until partway through the year, any change in the SEC’s enforcement posture would be more fully reflected in the 2018 enforcement report. “A year from now we will have a better sense for how the new Administration at the agency approaches enforcement and what issues are in the marketplace that they have to deal with."

Kornblau cautions that even if there is an apparent decrease in enforcement activity, compliance officers should not let up focus on policing their firms’ activities. “It would be a mistake to take the focus off of compliance because of a belief that the SEC is in a deregulatory mode because the market often has surprises that require the agency to take action and the only way to be prepared for that is to remain vigilant on compliance." 

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