On the West Coast, the stepped-up enforcement is, in part, simply a function of the expansion of the Los Angeles office, which oversees SEC activities in California and eight other Western states. Today, the office has three times as many employees as it did in the early 1980s. Tyson says most are enforcement lawyers, the foot soldiers in the SEC s fight against fraud. The commission has also streamlined its regulation of the investment-adviser industry in the recent years. Tyson says she expects the aggressive policy to continue under incoming SEC head Harvey Pitt, who is expected to name a permanent head of the SEC s Los Angeles office it could be Tyson, it could be someone else this fall.
Challenges remain at the commission.
Jamieson at Registered Representative says the SEC continues to suffer from high turnover because it pays its attorneys far less than they could get working on Wall Street. That s a key thing they need to do to make it better, Jamieson says. They have a lot of these young attorneys, who are very smart people, but they don t stick around that long. As a result, most of the frauds targeting individual investors are ridiculously easy to spot and avoid. That s because they promise high returns with low or no risk and require immediate action - red flags rarely associated with legitimate offerings.