White Wants SEC Policing Modeled on Giuliani’s ‘Broken Windows’

U.S. Securities and Exchange Commission Chairman Mary Jo White said her enforcement program will emulate the “Broken Windows” strategy used by former New York Mayor Rudy Giuliani, pursuing small violations to avert a culture where laws are treated as toothless guidelines.

“Minor violations that are overlooked or ignored can feed bigger ones,” White said at a securities enforcement conference in Washington today. “What we can do is allocate our resources in such a way so that market participants understand we are at least looking and pursuing charges in all directions.”

White, since taking over the agency’s helm in April, has upended a decades-old policy of allowing defendants to settle cases without admitting wrongdoing and has said corporate penalties must have “teeth” to deter future misconduct. To cover broader ground with limited resources, she said the agency is using “force multipliers” such as data analytics and whistleblowers.

At the same time, White said, the enforcement division is prioritizing bigger cases to send a message of deterrence to the industry and boost investor confidence.

“I believe the SEC should strive to be that kind of cop -- to be the agency that covers the entire neighborhood and pursues every level of violation,” she said.

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