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The past few weeks have ushered in signs of what’s likely to come from the SEC’s Division of Enforcement under the Biden Administration, including a greater number of investigations and a tougher path to “bad boy” waivers for issuers. The SEC’s enforcement program plays a critical role in the agency’s tripartite mission, especially with respect to the protection of investors. The program, like many other aspects of the SEC, takes many of its cues from the agency’s leadership. At least for now, Acting Chair Allison Lee is at the helm. Before becoming a Commissioner, Lee was a former SEC enforcement staffer and previously served as enforcement counsel to a former Commissioner.
By Sylvan Lane - 01/29/21 10:10 AM EST
The Securities and Exchange Commission (SEC) said Friday that it will investigate why certain online trading platforms blocked users from purchasing highly volatile stocks and if illegal market manipulation spurred the recent surge in stocks such as GameStop.
In a statement, the agency said it was “closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days” and would “review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.”
“Our core market infrastructure has proven resilient under the weight of this week’s extraordinary trading volumes. Nevertheless, extreme stock price volatility has the potential to expose investors to rapid and severe losses and undermine market confidence,” said acting SEC Chairwoman Allison Herren Lee and Commissioners Elad Roisman, Hester Peir
“It’s an honor to continue my service on the Commission in this new role,” Lee said in a Thursday statement. “I have tremendous respect for my colleagues on the Commission and the exceptional staff across the agency, and look forward to working closely with them. Together we will continue the agency’s work of protecting investors and ensuring market integrity.”
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Lee will replace Elad Roisman as the SEC’s acting chief. Roisman, a Republican commissioner, was appointed by Trump to serve as acting chairman following the December resignation of former SEC Chairman Jay Clayton.
Democrats will take control of the SEC if the Senate confirms Gensler as chairman. The agency is currently split between two Democrats, Lee and Commissioner Caroline Crenshaw, and two Republicans, Roisman and Commissioner Hester Peirce.
Allison Herren Lee
Lee was designated to the position by President Joe Biden as his official nomination to lead the agency, Gary Gensler, awaits Senate confirmation. If confirmed, Gensler will take over as chairman and give Democrats a 3-2 majority on the Commission.
“It’s an honor to continue my service on the Commission in this new role,” Lee said in a press release. “I have tremendous respect for my colleagues on the Commission and the exceptional staff across the agency and look forward to working closely with them. Together we will continue the agency’s work of protecting investors and ensuring market integrity.”