SEC Enforcement Outlook for 2023

January 2, 2023 – Media Mention

Maxim Nowak, counsel in Herrick’s Litigation Department, spoke to Law360 about some anticipated priorities for the Securities and Exchange Commission ("SEC") for 2023. 

The article notes that the SEC has asked Congress for money to add 125 new positions to the division. The request for additional funds, which was granted in the $1.7 trillion government funding bill passed in December, is "signaling that the trend of increased enforcement is going to continue" into 2023, Max explained.

"With broader market conditions continuing to deteriorate ... we tend to see some more bad activity going on," Max continued. "And I think you're going to see an SEC with more resources that will continue to be very active and aggressive in following its enforcement priorities."

The article further highlighted that even as the SEC responds to possible violations in the crypto industry or the ESG space, the SEC's enforcement division is also likely to continue pursuing more "bread and butter" issues such as insider trading, Max said. 

"I think you're going to see a lot of insider trading charges in the next year," Max said. "And I don't think there'll be anything particularly novel, or unique about any of the charges brought."

Max also tied the anticipated uptick in insider trading cases to the current struggles in the stock market. The S&P 500, for example, was down 20% between the beginning of 2022 and mid-December, according to market reports.

"I just think that people get desperate, and people do stupid things," Max observed, adding that the SEC could set its sights on other traditional securities violations, such as market manipulation, in addition to insider trading as the economy continues to struggle.

Read the full article in Law360 here. Access may require a subscription.