Wall Street’s Top Cop Chases Loose Change

After Jay Clayton became chairman of the Securities and Exchange Commission in early May 2017, agency officials promised more quality and less quantity. That was meant, in part, as a repudiation of Clayton’s predecessor, Mary Jo White, who brought the “Broken Windows” philosophy of law enforcement to market regulation.

But 13 months in, Clayton’s SEC appears to be giving quality short shrift, at least as measured by the settlements it is reaching. According to a recent, previously unreported study conducted by Urska Velikonja, a professor of law at Georgetown University, the SEC’s monetary punishments plunged 93 percent in the period from October 2017 to March 2018 — the first half of the SEC’s 2018 fiscal year — compared with the amount in the period a year earlier. The total of $102 million was down from $1.4 billion and was the lowest of any similar period for at least the past 12 years. The number of cases in the same period was down by a quarter. That suggests Clayton has refocused the SEC’s lens on either smaller fish or smaller frauds.