Enforcement attention on activities involving the most culpable individuals and firms, and the most harm to investors may be the next phase in SEC enforcement.
There is an opportunity cost to its enforcement actions. It might be the best use of the SEC’s resources not to sue over technical violations and other deficiencies that do not involve scienter. The SEC should not lose sight of wrongdoing involving pump and dumps, boiler room tactics, and affinity fraud. Such violations require Commission attention because they result in great harm to their victims and can have drastic consequences for the markets.
Nonetheless, it is likely that this suggestion will fall on deaf ears given recent SEC actions.