At a recent securities conference, Steven Peikin, co-director of the SEC’s enforcement division, indicated the SEC would “drop the ‘broken windows’ strategy of pursuing many cases over even the smallest legal violations,” according to a report in The Wall Street Journal. In light of budgetary constraints, “it may be the case that we have to be selective and bring a few cases to send a broader message rather than sweep the entire field,” said Peikin.

The SEC’s “broken windows” strategy dates back to a 2013 speech in which former SEC Chair Mary Jo White stated that the SEC was “looking for the ‘broken windows’ in our markets—and not overlooking the small violations to avoid breeding an environment of indifference to our rules.” However, the strategy was controversial even among SEC commissioners. In a 2014 speech, Commissioner Michael Piwowar argued: “If every rule is a priority, then no rule is a priority. If you create an environment in which regulatory compliance is the most important objective for market participants, then we will have lost sight of the underlying purpose for having regulation in the first place. Rather than enabling vital and important economic activity, we will have unnecessarily shackled it—and our country will be far worse off from the absence of such activity.”

Shifting away from the “broken windows” strategy will allow the SEC to focus on the worst fraudsters and other wrongdoers, and should help alleviate market participants’ fears of being pursued over even minor filing violations.