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Attorneys Decry Increasing Convergence Between SEC Exam, Enforcement Functions

Publication Date: 
August 15, 2013
Securities Law Daily - BNA
Yin Wilczek

Professor Joseph Grundfest spoke with Yin Wilczek of Securities Law Daily-BNA on the close relationship between the SEC and the Office of Compliance Inspections and Examinations and why "no one should be surprised" by it. 

Attorneys Aug. 11 voiced concern over the increasing collaboration between the Securities and Exchange Commission's Enforcement Division and Office of Compliance Inspections and Examinations.

The commission has taken the collaboration to “an extreme,” said Carmen Lawrence, a partner in Fried, Frank, Harris, Shriver & Jacobson LLP's New York office. “We are actually beginning to think of the examination as almost the first stage of an investigation because the examiners come in and that's really very much the approach that is taken.”


Joseph Grundfest, a Stanford law professor and a former SEC commissioner, observed that no one should be surprised by the units' close collaboration. However, he agreed that the “exam function has become more adversarial.” The equilibrium recently has changed, both from the SEC and registrants' perspectives, he said.