Yesterday, at Securities Enforcement Forum 2013 in Washington, D.C., SEC Chair Mary Jo White delivered a very interesting speech in which she said that it was her goal for the the SEC to be--or at least appear to be--"everywhere."

Chair White said that investors do not want a securities regulator that "ignores minor violations, and waits for the big one that brings media attention," and she compared her enforcement approach to the “Broken Windows” strategy that was employed in the 1990s by then-New York City Mayor Rudy Giuliani and Police Commissioner Bill Bratton. Under Giuliani and Bratton, the NYPD pursued all infractions, no matter how small, to avoid an environment of disorder and to send a message of law and order.

Similarly, Chair White said, her co-directors of Enforcement, George Canellos and Andrew Ceresney, are working to ensure that the agency pursues all types of wrongdoing and "covers the entire neighborhood and pursues every level of violation." White acknowledged that with limited resources the agency could not literally be on every corner, but said that the SEC would allocate its resources in a way that allows it to at least look and pursue misconduct "in all directions."

Chair White said the SEC's enforcement strategy would include the following:

1. An Expanded "Field of Vision and Reach." Chair White explained that the SEC would expand its reach in several ways, including leveraging the strength of its exam program; incentivizing whistleblowers through significant awards like the $14 million bounty awarded last week; collaborating with the DOJ, FINRA, and state securities regulators; and making better use of technology such as the Advanced Bluesheet Analysis Program (ABAP), which analyzes data provided by market participants to (a) identify suspicious trading before market-moving events, and (b) show the relationships between traders. 

2. Pursuing "Gatekeepers." These include investment company boards of directors and auditors. Chair White noted that the SEC recently launched Operation Broken Gate – an initiative to "identify auditors who neglect their duties and the required auditing standards" that produced its first set of charges last week.

3. Fixing "Broken Windows." Chair White stated that smaller matters that are the securities equivalent of "broken windows" would not be ignored, such as violations of Rule 105 of Regulation M and microcap fraud.

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