The National Law Journal Publishes Novel Policy Proposal Urging President Trump to Strengthen the SEC

March 7, 2017

On March 6, 2017, The National Law Journal published an essay principally authored by BLB&G’s Dave Kaplan urging President Trump to rescind Executive Order 13433, which prevents the SEC and other federal agencies from partnering with private firms on a contingent-fee basis. 

The piece, entitled “President Trump, Let’s Strengthen the SEC,” argues that allowing the SEC to partner with private firms to prosecute complex litigation alleviates the financial and resource constraints that effectively limit the SEC’s oversight functions.  Characterized by experts as “overstrained and underfunded,” the SEC has been unable to pursue many challenging and meaningful enforcement actions since the executive order went into effect in 2007, failing for instance to “prosecute a single case against a top bank executive for financial crisis-era misconduct.”   

Instead, the author contends that by restoring the SEC’s ability to enter public-private partnerships and “letting the free market do what it does best, efficiently allocating resources to solve problems,” the SEC can refocus its resources on other objectives and transfer the financial risk of prosecuting complex, extended litigation to private firms, all “at no cost or risk to the American taxpayer.”

The author suggests that rescinding the order would not only be in line with the Republican Party platform, which praises the efficiencies of public-private partnerships as essential to “save the taxpayers’ money,” but that it would also fulfill Trump’s campaign promise to “police markets for force and fraud” and hold “both Wall Street and Washington accountable.”

Mr. Kaplan prosecutes direct and class action securities, and derivative and general business litigation on behalf of the firm’s institutional investor clients.