Banks, asset managers and public companies could find it easier to settle regulatory enforcement actions without damaging other parts of their business, the Wall Street Journal reported. The Securities and Exchange Commission said on Wednesday that a company can now negotiate a penalty while at the same time seeking the waivers needed to limit the consequences of its alleged misconduct. Wall Street banks such as Wells Fargo & Co. and Citigroup Inc. have often needed such disciplinary waivers to exclude business activities from automatic bars that are triggered when they settle enforcement actions. The most important of such waivers affect Wall Street’s ability to use fundraising methods that avoid regulatory red tape. For example, a bank or hedge-fund manager that settles an enforcement action without a waiver can lose the right to easily raise money in the private markets. Another waiver is needed to continue managing mutual funds if a bank or asset manager settles certain civil or criminal enforcement actions.
