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On Friday, Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement, joined PLI’s 56th Annual Institute on Securities Regulation to deliver prepared remarks and answer questions. His speech echoed some themes from Chair Gensler’s speech, including that the “rules of the road” can’t just cover fraud. Acting Director Wadhwa remarked that failures to comply with the securities laws caused by negligence also erode trust in our financial markets.

WilmerHale’s Stephanie Avakian noted how difficult it can be to lead the Division through a time of transition, especially when there is a change of political party, and asked Acting Director Wadhwa what guidance he is giving Enforcement Staff and what they are trying to get done in this time.

Acting Director Wadhwa responded that the SEC’s mission remains the same and the Division’s focus on that mission is the same as it was prior to November 5. The vast majority of the Staff is long-tenured employees who have been through multiple administration changes, including political parties, and know what to do, since the Staff doesn’t change much administration over administration. But for newly hired Staff members who are going through this for the first time, the advice is to keep doing what they’re doing.

Acting Director Wadhwa noted that no one has asked the Division to put pencils down or take a breather until Inauguration Day — they remain focused on the mission and doing the work in their control and that the work continues with the same degree of urgency.

On that front, he noted that the Division was incredibly busy over the summer and that the base of work did not slow down in October as it sometimes does. He noted that October 2024 was the busiest first month of the fiscal year in over two decades.

When asked about the Division’s focus areas over the last four years, particularly concerning disclosure controls, cyber disclosures and ESG matters, Acting Director Wadhwa noted that the Division’s recent actions in these areas have relied on existing securities laws, rules and regulations applied to financial reporting and other public statements and the agency will continue to pursue similar securities law violations regardless of the subject matter of the statements.

– Meredith Ervine