SEC to Setup Specialist Teams to Tackle Investment Fraud
Securities attorneys have been following efforts by the Securities and Exchange Commission (SEC) to fine-tune its capabilities for cracking down on investment fraud.
According to the Wall Street Journal, those methods run the gamut from specialist teams for specific frauds all the way down to Twitter. Former federal prosecutor Robert Kuzami is working on plans to create specialized task forces to deal with specific fraud cases. Currently, the agency operates under a more traditional pattern, using general enforcement personnel. Kuzami discussed his plans at a recent meeting with 150 senior SEC officials.
Separate teams are not entirely unheard of at the SEC. Currently the agency has a separate team for internet enforcement, and sometimes, temporary teams are created for dealing with specific abuses. Kuzami’s plans will create specialized teams that will focus exclusively on specific securities investment fraud areas.
There are critics of Kuzami's plans and, at this point, they are still in the nascent stages. However, as financial products become more complex and the nature of financial frauds changes, making it harder to detect schemes, the agency will need specialized teams to enhance its efficiency. Specialized teams could make it simpler for the agency to be pro-active in detecting investment frauds, rather than finding out only after billions of dollars have been lost.
Meanwhile, the agency seems to be making efforts to break away from its conservative, insulated image. One of the most severe criticisms against the SEC is regarding its failure to be open and transparent, and engage the public in its activities; that is changing. The agency launched three separate Twitter feeds on general news, investor education, and job opportunities. The feeds are still in the early stages, but it is a promising first step to sharing more with a critical public. With all these new developments, is it too much for securities attorneys to hope that change is finally coming to the SEC?
