SEC Official Says Too Many Regulators Are ‘Piling On’Suzi Ring
When too many U.S. authorities conduct overlapping investigations it can disrupt regulatory probes and lead to unnecessary lawsuits, a Securities and Exchange Commission official said.
“A particular firm could be sued by seven different regulators,” Scott Friestad, associate director of the SEC’s enforcement division, said today at a conference in London. “There’s a risk of all piling on and there needs to be care that it makes sense.”
The SEC frequently needs to coordinate investigations with other federal and state agencies and prosecutors who have become more active in policing financial markets. International investigations also pose a coordination challenge, Friestad said, estimating that one in three of the SEC’s cases involves a regulator in another country.
SEC probes that are typically confidential can be disrupted when other authorities try to get attention for their work, holding a press conference “every time they issue a subpoena,” Friestad said.
Tensions flared in June when New York Attorney General Eric Schneiderman sued Barclays Plc, claiming the bank misled investors about the presence of “predatory” high-frequency traders in its dark pool. The SEC, which regulates and polices securities markets, has a confidential investigation into the same issue under way, a person familiar with the matter has said.
“Sometimes it feels like there are too many cooks in the kitchen,” Friestad said.