Regulatory Wrap Episode 31: The SEC’s Five Principles of Effective Cooperation

In Regulatory Wrap for the week to June 7, Rob Mason covers the SEC’s continued pursuit of regulatory transparency with its “five principles of effective cooperation” relating to investigations.

12 June 2024 2 mins read
Profile picture of Kathryn Fallah By Kathryn Fallah

In Regulatory Wrap for the week to June 7, 2024:

In this Regulatory Wrap, we unpack the “five principles of effective cooperation” that Gurbir Grewal, Director of the SEC’s Division of Enforcement, laid out. Firms that demonstrate cooperation and proactivity during investigations could even receive a reduction in charges.


1. Grewal states that self-policing enables firms to identify issues before they become a bigger problem and ties into fostering “tone from the top,” which is a principle that aligns with messaging we’ve previously seen from U.K. regulators

2. Alongside self-policing is self-reporting, which Grewal encourages firms to utilize before an internal investigation or even when uncertain about whether or not there is a violation, though this shifts from what firms’ legal teams typically advise

3. Remediation actions are another main point mentioned within these principles, such as disciplining or dismissing those involved in misconduct, as well as strengthening internal policies

4. Grewal encourages complete cooperation in sharing any materials that guide regulators towards finding information that’s relevant to an investigation

5. Finally, firms should collaborate with enforcement officers early, often, and substantively per SEC recommendation

This Regulatory Wrap is brought to you by Global Relay’s Director of Regulatory Intelligence, Rob Mason.

As regulators continue to practice transparency internally and encourage transparency within the industry, can you ensure your firm has developed comprehensive policies to flag issues and maintain effective cooperation?