U.S. Securities and Exchange Commission Lawyers Told to Seek Permission for Investigations
Lawyers at the U.S. Securities and Exchange Commission (SEC) have been told that they need to seek permission from the agency’s politically appointed leadership before formally launching probes. This change in procedure is a marked departure from the previous approach, where lower-level staff had the authority to issue formal orders of investigation.
The change was made under the new leadership at the SEC since President Donald Trump took office, with a team of three commissioners, including two Republicans and one Democrat. This means that enforcement staff must now get approval from the Commission for all formal orders of investigation, which are required to issue subpoenas for testimony or documents.
In the past, the Commission had the right of refusal, but it did not always exercise it. Proponents of the change argue that it will reduce harm to individuals subject to investigations, while others say it takes away staff autonomy. SEC enforcement staff can still conduct informal investigations without seeking approval.
The change is one of the first in enforcement at the SEC under the new leadership, which is expected to be more favorable to industry. The President has also signed an order vowing to end the “weaponization” of the federal government, including at the SEC, although the implications of this order for the SEC are unclear.