SEC's Acting Chair Gives Senior Officers Subpoena Power

Added Lee: "Returning this authority to the division's experienced senior officers, who have a proven track record of executing it prudently, helps to ensure that investigative staff can work effectively to protect investors in an era when the pace of fraud – like the pace of markets themselves – is ever more rapid."

GameStop Connection?

Pitt told ThinkAdvisor on Monday in an email that the action is "significant," and that the agency's probe of the Reddit GameStop squeeze "was a factor in making this move now."

Said Pitt, now CEO of Kalorama Partners and Kalorama Legal Services in Washington: "Giving the staff the ability to issue subpoenas without first receiving Commission authorization can expedite the initiation of investigative action, although the Commission has always been able to respond quickly when asked by the staff for subpoena power. There is pressure on the SEC to complete quickly its review of the circumstances surrounding the dramatic market activity in GameStop, AMC, etc. fueled by postings on Reddit, so this had to be a factor in the timing of this decision."

Nicolas Morgan, a partner at the global legal defense firm Paul Hastings in Los Angeles, told ThinkAdvisor Tuesday in an email that Lee's move "relates to the ease with which the SEC staff can obtain formal orders of investigation. Only after the staff has a formal order can they issue subpoenas to compel testimony and the production of documents. Before this change, only the directors of the Enforcement Division could approve the issuance of formal order."

Added Morgan, a former senior trial counsel in the SEC's Enforcement Division: "This has nothing to do with GameStop. This is the Biden administration SEC reversing an internal policy put in place at the beginning of the Trump administration. This will make the 30 or so senior staff members feel slightly more empowered, and we'll see slightly more formal orders issued."