Securities and Exchange Commission Historical Society

The Enforcement Division: A History

The Reagan Era and Insider Trading, 1980 - 1990

Renewed Support and the "Remedies Act"

Crop of the top third of the printed document
SEC News Release: Insider Trading Continues as High Priority

Insider trading declined as an issue at the end of the 1980s, as news of Milken’s and Drexel’s downfall combined with a takeover bust to make insider trading more risky and less profitable. The campaign against insider trading, though, had given a new boost to the SEC’s public image. It was one of the hot stories of the 1980s, even inspiring a Hollywood blockbuster, Wall Street, and the attention served, at least for a time, to give a enforcement work a bit of glamour. One Enforcement attorney recalled going to the airport in the mid-1980s and using an SEC credit card to buy a ticket on the shuttle, only to have the ticket agent respond “‘oh, you’re one of those guys?’ And that wouldn’t have happened two--three years before.”(1) The image did not always match the reality – as another SEC attorney said, “Gee, I wish it was as glamorous and exciting as it sounds”(2) – but it served to restore morale and keep the Enforcement Division one of the most popular places for young lawyers to work in the Federal government.

The publicity also ensured renewed support for the Division. As insider trading became a major issue, Congress increased the Commission’s budget, earmarking much of the money for enforcement.(3) By the early 1990s, the Division would employ 781 people, far more than twenty years before.(4) Congress also gave the SEC new powers that would have a profound impact over the next thirty years. In 1988 it passed the Insider Trading and Securities Fraud Enforcement Act, which imposed liability on some control persons and created a private right of action for illegal insider trading or tipping. More important was the Securities Enforcement Remedies and Penny Stock Reform Act of 1990: the “Remedies Act.” It built on the 1984 Insider Trading Sanctions Act by giving the Commission new powers to impose civil monetary penalties for a range of securities laws violations, to issue cease-and-desist orders, and to ask a federal court to bar an individual from serving as an officer or director of a public company.(5)  A decade after a new administration had threatened to gut the Enforcement Division, it emerged with an unsurpassed public image and unprecedented new powers.

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(1) John Sturc oral history: 16.

(2) McLucas oral history: 16.

(3) Stan Hinden, SEC Seeks Big Boost in Budget; Funds would beef up Enforcement Division, Wash. Post Dec. 6, 1986: D9.

(4) Atkins & Bondi, Evaluating the Mission: 371.

(5) Seligman 618; Ralph C. Ferrara, Thomas A. Ferrigno, and David S. Darland, Hardball! The SEC’s New Arsenal of Enforcement Weapons, 47 Bus. Law. 33 (1991).

Related Museum Resources


April 13, 1983
Selections from Hearing before the Subcommittee on Telecommunications, Consumer Protection and Finance of the Committee on Energy and Commerce, U.S. House of Representatives, 98th Congress, 1st Session on H.R. 559 (SEC Enforcement Legislation)

(Courtesy of the Library of Congress)

April 13, 1983
image pdf (Courtesy of the estate of John R. Evans; made possible through a gift from Quinton F. Seamons)
November 11, 1987
image pdf (Courtesy of National Archives and Records Administration)
November 16, 1987
image pdf (Courtesy of the Library of Congress)
December 15, 1987
transcript pdf (Courtesy of the Library of Congress)
September 28 and 29, 1988
transcript pdf (Courtesy of David S. Ruder)
September 28, 1988
image pdf (Courtesy of David S. Ruder)
document pdf (Government Records)
October 16, 1991
transcript pdf (Anonymous)
October 25, 1994
image pdf (Courtesy of Carrie E. Dwyer)
November 22, 1994
image pdf (Courtesy of Carrie E. Dwyer)
December 23, 1994
image pdf (Courtesy of Carrie E. Dwyer)
image pdf (Courtesy of Carrie E. Dwyer)
August 8, 1996
image pdf (Courtesy of Carrie E. Dwyer)
August 8, 1996
SEC Report regarding the NASD and the Nasdaq Market

(Courtesy of Carrie E. Dwyer)

August 8, 1996
image pdf (Courtesy of Carrie E. Dwyer)
August 8, 1996
image pdf (Courtesy of Carrie E. Dwyer)

Oral Histories

April 5, 2019

Thomas C. Newkirk

Thomas Newkirk spent 19 years -- from 1986 – 2004 -- in the SEC’s Enforcement Division. As Chief Litigation Counsel, he directed the Commission’s litigation against Drexel Burnham Lambert and Michael Milken, First Jersey and Eddie Antar (“Crazy Eddie”), and many emergency relief cases to freeze the proceeds of insider trading and halt on-going frauds. Then as an Associate Director, he led the investigations of significant financial fraud cases (Royal Ahold, PNC Financial Services Group, Tyco, Arthur Anderson, Waste Management), mutual fund cases (The Dreyfus Corporation, Kemper Financial Services), and broker-dealer cases (Prudential Securities, Gruntal & Company).


20 October 2005

Enforcement Remedies

Moderator: Theodore Levine
Presenter(s): Ralph Ferrara, William McLucas, Mary Schapiro, Linda Thomsen

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