John Reed Stark: "The Most Powerful Securities Regulator in the World has Gone Radio Silent"

The SEC’s New Enforcement Strategy is Shockingly Simple: Don’t Enforce

Per two recent reports, the Enforcement Division of the U.S. Securities and Exchange Commission isn’t just pulling back — it’s vanishing — quietly adopting a new ethos of absence, silence and regulatory invisibility.

Meanwhile, in nearly five months since Judge Margaret Ryan became SEC Enforcement Director, Judge Ryan’s only public statement was a perfunctory three-sentence acknowledgment of a jury verdict in a case she didn’t bring. No agenda-setting speeches, no interviews, no podcasts, and no public messaging campaign laying out enforcement priorities.

In short, the most powerful securities regulator in the world has gone radio silent — and the enforcement data explains why.

Supreme Court to Review SEC Power to Recoup Illegal Gains

The US Supreme Court will consider how much power the Securities and Exchange Commission has to recover illegal profits in a case that could blunt one of the agency’s most potent enforcement tools.

The justices said Friday they will decide whether the SEC must show identifiable investor harm in order to win “disgorgement” from people and firms found to have engaged in securities fraud.

The case concerns what has traditionally been one of the Wall Street watchdog’s favorite legal remedies. The commission secured orders for more than $6 billion in disgorgement and related interest in fiscal 2024, almost three-quarters of the commission’s total financial penalties.

US SEC dismisses lawsuit against Rio Tinto ex-CFO

The U.S. Securities and Exchange Commission on Friday dismissed its lawsuit against a former Rio Tinto chief financial officer, ending a long-running fraud case over a bad investment in a Mozambique coal project by one of the world’s largest mining companies.

In a Manhattan federal court filing, the SEC said it was dismissing its civil case against Guy Elliott “in the exercise of its discretion,” without addressing the merits of its remaining claims.

Friday’s dismissal ends a more than eight-year-old case in which Rio Tinto agreed to pay a $28 million civil fine and former chief executive Tom Albanese accepted a $50,000 fine, both in 2023.

Elliott denied wrongdoing. In a joint statement, his lawyers called the dismissal “a complete defense victory.”

The SEC did not immediately respond to requests for comment.

GOP Lawmakers Back Stock-Trading Crackdown

House Republicans including GOP leaders are lining up behind a stock-trading crackdown that they think is their best shot at addressing long simmering concerns about lawmakers potentially profiting off insider information.

Rep. Bryan Steil (R., Wis.), chairman of the Committee on House Administration, took the lead on drafting the bill that would prevent House and Senate lawmakers from buying additional individual stocks. He has the blessings of House GOP leadership and has secured buy-in across the various GOP factions for the “Stop Insider Trading Act,” which he plans to formally introduce Monday.