A financial firm’s decision to disclose record-keeping rule violations directly to the US Securities and Exchange Commission can potentially reduce the fine it receives by a significant amount, a senior enforcement official said.

Sanjay Wadhwa, deputy director of the SEC’s enforcement division, on 3 April detailed how the regulator assesses fines in such cases, adding that he was responding to “a critique from the defence bar” that the agency was “picking numbers at random.”