In May 2019, the SEC completed its second full year under the stewardship of Chairman Jay Clayton. Unlike the “broken windows” philosophy1 of Chair Mary Jo White that left little room for interpretation, Chairman Clayton has steadfastly adhered to his focus on “Main Street investors,”2 which has proven to be a concept that is straightforward in its delivery but difficult to predict in its application. As we have discussed in our previous White Papers, the ideological orientation of the Commission as a whole has been a challenge to ascertain based on several factors, including limitations on its ability to collect disgorgement, constitutional challenges to its administrative procedures, the federal government’s repeated budgetary issues, and the explosive growth of digital asset-based offerings, to name a few.
More specifically, when we try to understand where the Enforcement Division is heading, we examine the nature of cases that it has filed, the remedies that it has obtained and forgone, and the public statements of its Commissioners and Senior Officers, among other factors. But during Chairman Clayton’s tenure, these internally driven factors have been significantly affected, and in many ways overtaken, by outside factors that have never been present before or that have become more pronounced than ever before. For example: