President Joe Biden's victory is already leading to consequences for Wall Street, as U.S. regulators are scrapping a Trump-era policy that critics contend helped insulate firms from tougher penalties.
At issue are waivers that banks, hedge funds and other financial companies must obtain to protect themselves from knock-on sanctions that are automatically triggered when they settle enforcement cases with the Securities and Exchange Commission. In a major policy shift, the SEC said Thursday it would make it harder for firms to obtain such reprieves.
The implications for financial firms could be significant, as they rely on the waivers to keep doing activities that are vital to their businesses, such as raising money in capital markets and issuing new securities and debt. But progressive lawmakers, including Sen. Elizabeth Warren, D-Mass., have questioned why securing the passes has been akin to a rubber stamp for banks and asset managers that seem to get in trouble again and again.
Waivers "should not be used as a bargaining chip in settlement negotiations or regarded as on obstacle to be overcome on the way to a settlement," Acting SEC Chairwoman Allison Herren Lee said in a statement. "A waiver is not the default position under the law, and should not be considered one under our processes."