Two years after Congress voted to boost its budget, the Securities and Exchange Commission has nearly completed a monumental hiring binge, adding 932 employees between December 2002 and July 2004, which boosted staff to 3,520 after attrition. Now that the agency has beefed up, how will its approach change?

So far, the answer seems clear. “It has become far more aggressive,” says Michael Caccese, a partner with Kirkpatrick & Lockhart LLP. “This is definitely not your father’s SEC.” In fiscal year 2003, the SEC launched a record 679 enforcement actions.

And to ward off criticism that it is always responding to last year’s crisis, the SEC has initiated a new approach to investigation, which it calls wildcatting. When the agency spots something amiss at one company, it can initiate a broad sweep of an entire industry, as it has on such issues as oil-reserve accounting and accounting for pharmaceutical sales. “It makes sense,” says Alan Bromberg, a professor at Southern Methodist University’s Dedman School of Law. “If there’s something going on in an industry, it may be more widespread than you can tell from the first look.”

Justified or not, such tactics are making life difficult for companies. Complying with SEC requests for information can be expensive and disruptive. The situation is even more burdensome for investment firms, which must contend with routine examinations as well as nationwide sweeps on such issues as investment performance and revenue sharing for 401(k)s.

To be fair, the SEC’s staff is catching up after years of being undersized and underpaid. And the agency has uncovered some notable scams. The question now is whether it can keep up with the bigger workload that wildcatting generates. Says Greg Bruch, a partner with Foley & Lardner LLP and a former SEC attorney: “It raises the question of how realistic it is that the SEC can follow up on all the leads they generate.”