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When I was asked to take this role, people were talking about abolishing the SEC. That was unthinkable to me, and it made the job more compelling. The SEC had fallen behind in areas like technology and staffing, and the world had changed around us. I took the handcuffs off the staff to be more aggressive and brought in experts so we could do the toughest cases. I made it clear that we had to be focused on investors.
I hadn’t anticipated all the hurdles to moving quickly, like not being able to open an investigation without having to get five commissioners to vote on it. We got a lot done in Dodd-Frank, but many of the time frames that were built into the law were unrealistic. The budget was a consistent frustration. We have to go to Congress every year, and it’s an uncertain process at best. It didn’t allow us to get everything we needed to ramp up the technology quickly or to deal with a midyear crisis.
We needed to be the cop on the beat. In the cases coming out of the financial crisis, we named over 120 individuals and entities, and 57 of those individuals were CEOs, CFOs, and other senior management. For our sanctions to work, they had to bite. But we’re limited by law in how much we can get in a settlement. If a firm sells a fraudulent product and it makes $10 million but investors lose $100 million, we can only get $10 million in disgorgement. Last year I asked Congress for the ability to get that $100 million. Senator (Jack) Reed and Senator (Chuck) Grassley introduced a bipartisan bill in this Congress that would do that. I hope they reintroduce it in the next Congress.
I came in with the intention of serving as long as it made sense for me to do so. The election was a natural moment to think about whether I wanted to stay longer, and I’m thrilled to turn the reins over to my longtime colleague Elisse Walter. Right now, I’m just packing boxes. But it’s very strange in government—you can’t just pack boxes. The archivist has to make sure you don’t take anything that’s not public information.
For four years we’ve been running a marathon at a sprint pace. The spotlight has been very bright, and by all measures, we’re in a leagues-better position. Changing a business takes an enormous amount of time and communication and effort from the leadership. This is a very different agency than it was four years ago. — As told to Diane Brady