SEC Requires Approval for Investigations

SEC Requires Top-Level Approval for Formal Investigations

• The SEC now mandates that lawyers obtain approval from politically appointed commissioners to start formal investigations.
• This change follows the leadership transition with Mark Uyeda appointed as Acting Chair.
• Previously, enforcement staff could independently initiate formal investigations, though commissioners had oversight.
• The commission currently includes three commissioners: Uyeda, Hester Peirce, and Caroline Crenshaw.
• Under former chair Gary Gensler, the SEC increased regulatory actions against major crypto exchanges.

The SEC has implemented a new requirement for lawyers to secure commissioner approval before launching formal investigations. This change comes after leadership transitions and aims to ensure more discerning oversight of investigations. Previously, enforcement staff had greater autonomy in initiating probes.