This site has been a big fan of SEC Commissioner Hester Peirce.

Peirce is soon to leave her position and this prior post titled “Peirce Out” highlighted a speech by the same name she delivered in which criticized various aspects of SEC enforcement – including as to the Foreign Corrupt Practices Act.

This post collects Peirce’s greatest hits.

For starters, throughout her tenure, Peirce has objected (in whole or in part) to the majority of corporate FCPA enforcement actions she has voted on while on the Commission. (See here, here, here, here, and here).

In a 2018 speech, Peirce discussed several FCPA-relevant topics such as the seeming emphasis by government of quantity of enforcement over quality of enforcement; the timing of SEC enforcement actions at the end of a fiscal year as a form of “earnings management;” how the SEC should use other avenues short of enforcement actions to address new and emerging issues; the importance of due process in enforcement; how enforcement agencies should not expand the law through enforcement just because they can; and how issuers and others subject to SEC enforcement settle for simple reasons of risk aversion. (See here).

In 2019, Peirce delivered a speech titled “Reasonableness Pants” and stated:

“A strong enforcement program requires us—to draw from the admonition a judge recently gave to us in a matter before her—to “put on [our] reasonableness pants.” The SEC ought always to wear reasonableness pants, and I would like to talk today about what those reasonableness pants look like on a regulator.” (See here).

She continued:

“Reasonableness pants should not only be threaded with due process, but they also should fit properly. In other words, the SEC ought to take care in how it exercises its authority. The goal should not be for us to stretch our authority to its limits and beyond but instead to act carefully and cautiously.”

Peirce also criticized SEC “secret law” and how “this secret law, as a practical matter, binds market participants like law does but is immune from judicial—and even Commission—review. We have our own secret garden—a tangle of staff pronouncements hidden beyond a wall without a readily accessible entrance.”

In 2020, Peirce joined other SEC Commissioners in acknowledging that anti-corruption policy is outside of the SEC’s expertise. (See here).

In 2020, Peirce and another SEC Commissioner hit an internal controls home run (see here) by noting:

“Many have come to think of Section 13(b)(2)(B) as a general “internal controls” provision, and some may be tempted to view it as a way to ensure that companies adopt and follow all manner of worthy practices, policies, and procedures for good corporate governance and legal or ethical compliance.  That temptation may be heightened by the ease with which a violation of this provision can be alleged.  No scienter need be found; even good-faith corporate behavior may be scrutinized with 20/20 hindsight; and as others have recognized, “there are no specific standards” in the statute “by which to evaluate the sufficiency of controls,” making it “a highly subjective process in which knowledgeable individuals can arrive at totally different conclusions.”

In light of those temptations, we should be especially mindful of the limits Congress chose to enact along with this provision.  By thinking of Section 13(b)(2)(B) as a generic “internal controls” provision, we overlook an important limit:  This provision requires not “internal controls” but “internal accounting controls.”

[…]

Section 13(b)(2)(B)’s companion provision, Section 13(b)(2)(A) [the books and records provisions], likewise requires issuers to make and keep “books, records, and accounts” that “accurately and fairly reflect the transactions and dispositions of the assets” of the issuer.”

In 2022, Peirce again hit a home run (see here) when criticizing an SEC enforcement action by noting as follows.

“What [the SEC or an SEC Commissioner] might prefer and what one might do as a matter of prudence should not be confused with what one must do as a consequence of a legal obligation”

“Treating the failure to take the prudent and cautious path as though it is a strict liability violation of some affirmative legal obligation is not supported by the law.”

In 2022, Peirce criticized an SEC enforcement action for how the SEC used the settlement process to obtain voluntary compliance with requirements that it lacks statutory authority to impose. (See here).

In 2023, Peirce criticized the SEC’s internal controls enforcement theory in an enforcement action by stating that the SEC “does not have authority to tell companies how to run themselves – but [the SEC is] now routinely us[ing] the internal controls provisions to do just that.” (See here).

In 2023, Peirce again criticized an SEC enforcement action by stating: “the SEC once again has sat down at the gaming console to play its new favorite game “Corporate Manager.” (See here).

In 2024, Peirce again criticized the SEC’s internal controls enforcement theory in an enforcement action by issuing a statement titled “Hey, Look, There’s a Hoof Cleaner” and stating “the Commission in recent years has taken to treating Exchange Act Section 13(b)(2)(B)’s internal accounting controls provision as a Swiss Army Statute to compel issuers to adopt policies and procedures the Commission believes prudent.” (See here).

In 2024, in connection with another enforcement action, Peirce blasted the SEC for its “Monday morning quarterbacking.” (See here).

In 2025, Peirce delivered a speech highlighting the SEC’s “limited mission” and urged “the SEC to refrain from using enforcement actions to override managerial decision-making.”

She stated:

“These actions may seem benign and unassailable at first glance—tighter corporate controls are good, right? But, if replicated, they will become a subtle mechanism for the Commission to insinuate itself into corporate management. Some might well argue that this has already occurred. For example, the Commission has taken an aggressively broad interpretation of Exchange Act Section 13(b)(2)(B)’s internal accounting controls provision. As Acting Chairman Uyeda and I noted in a dissent to one case, “The Commission’s attempts to convert an internal accounting controls provision into an ever-unfolding utility tool that magically converts every corporate activity into something the Commission regulates are inappropriate extensions of the agency’s authority.” In another recent example of management through enforcement, the Commission used Rule 13a-15(a), which requires companies to have “disclosure controls and procedures,” to punish a company for “lacking controls and procedures . . . to collect or analyze employee complaints of workplace misconduct” given that it disclosed a risk factor “related to its workforce and how its ability to attract, retain, and motivate skilled personnel might materially impact its business.” The Commission did not charge the company with making misleading disclosures. By requiring companies to establish disclosure controls for information that is not important for disclosure purposes, the Commission “seeks to nudge companies to manage themselves according to the metrics the SEC finds interesting at the moment.” As one law firm explained, this enforcement action “may signal continued and increased SEC effort to use internal controls requirements to address workplace activity not commonly associated with the business and financial performance at the heart of SEC disclosure rules.” Restoring the internal accounting controls and disclosure controls and procedures requirements to their important, but limited intended purposes is a change in the right direction to rein in the scope of enforcement actions.”