SEC’s enforcement actions slow down, CFOs must proceed with caution

doesn’t mean CFOs should take a reduction in regulatory burdens to mean total free rein. Securities experts advise caution in navigating the shifting enforcement landscape.

Schiffrin and Lisa Bragança, a former SEC branch chief turned securities defense attorney, emphasize the importance of playing the long game. While Atkins may push for deregulation and aim to “future-proof” policies, it’s crucial to remember that SEC chairs have short tenures, and statutes of limitation are long. CFOs should not rush to adapt to new disclosure regimes without considering obligations under state rules and other regulatory bodies.

“Tread carefully,” advises Bragança. The changing views of regulatory priorities mean CFOs need to be vigilant in meeting their fiduciary duties and disclosure obligations. It’s a complex time, and CFOs must approach regulatory changes with caution, understanding that enforcement priorities can shift.

Looking ahead, Bragança foresees a potential increase in state-by-state regulation as federal oversight decreases. States may step in to enforce stricter regulations where the SEC recedes, requiring CFOs to remain compliant on multiple levels. Schiffrin also suggests that state regulators may fill the void left by federal agencies, focusing on areas that require greater enforcement.

It’s essential for CFOs to keep a watchful eye on regulatory developments at all levels. While federal changes may be significant, state regulations and other regulatory bodies still play a crucial role in setting compliance standards for CFOs. An example of this could be the strain on regulatory bodies like the Public Company Accounting Oversight Board due to budget cuts, potentially impacting audit quality and leading to increased financial misconduct by companies.

In conclusion, CFOs must remain vigilant and adaptable in the face of changing regulatory landscapes. Following potential shifts in regulatory priorities and staying informed about enforcement alternatives are crucial to navigating the evolving regulatory environment. By considering the possibility of regulatory flux and preparing accordingly, CFOs can ensure compliance and mitigate risks in an ever-changing financial landscape.