SEC Chair Says Regulation Continues Despite Shutdown
The ongoing government shutdown reportedly hasn’t completely shut down the Securities and Exchange Commission (SEC).
The regulator is still monitoring the markets for signs of manipulative behavior, SEC Chair Paul Atkins said in a Wednesday (Oct. 22) CNBC interview.
“Even during the shutdown, as we conduct our surveillance on the marketplace, we have stopped trading on eight foreign companies on Nasdaq that showed indicia of manipulative behavior — ramp and dump, we call it,” Atkins said.
“So we are monitoring the market for the behavior that indicates, you know, hanky-panky going on in the marketplace,” he added.
The commission, Atkins said, is searching for signs of suspicious trading activity, like sudden and unexplained jump in stock prices despite no news, or anomalous trading surrounding company announcements that could point to insider trading.
“We have a lot of different tools that we can use to analyze this, and we work closely with the self-regulatory organizations, the exchanges and so forth, because they are the immediate ones looking at their markets and doing surveillance over that,” he added.
Still, he said the shutdown has affected the regulator’s work, such as reviewing initial public offering (IPO) registration statements and cryptocurrency legislation proposals.
“Our staff can’t be working on some of the things we would like to roll out,” Atkins said of the pending crypto legislation. “Hopefully by the end of the year, if Congress can let us get back to work, that’s what we’re looking for.”
In regard to IPOs, the SEC said earlier this month that because it was not able to review registration statements, the regulator would not look to penalize companies that left out pricing information from prospectuses filed during the shutdown and then listed either during or after the shutdown.
This week also saw a report that the legal battle over the Trump administration’s mass firings of staff at the Consumer Financial Protection Bureau (CFPB) was in limbo due to the shutdown.
The White House has asked for a stay on a rehearing in the case because the relevant Justice Department employees are not permitted to work during the shutdown, Federal News Network reported Wednesday (Oct. 22).
“One interesting thing that we’ll have to see, though, is the courts themselves,” Rich Andreano, a partner at Ballard Spahr, told Federal News Network. “Apparently, they have funding to last sometime into November. If we get to the point they run out of funds, do we have no judges to hear cases at that point? So, it could, if this is an extended one, it could get quite interesting to see what happens at that point.”
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