Ex- SEC Head Urges Agency to Check Use of In-House Court

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Publisher: Law360
Author: Stephanie Russell-Kraft
 

Former US SEC Commissioner Chair Christopher Cox urged the agency Wednesday to exercise more discretion in its use of administrative proceedings in order to fight the troubling appearance that they unfairly favor the SEC.

Speaking at a securities enforcement conference in San Francisco, Cox urged the SEC to further clarify how it decides which cases it will bring in federal court or in-house courts where it has a greater win-loss record. The agency has spent the past year fighting off criticism and a growing public perception that it uses administrative proceedings solely to get a leg up on defendants. Unlike federal courts, administrative proceedings do not allow juries or follow the federal rules of evidence, and the SEC has a greater win-loss record for the cases it brings in-house.

“Substituting these proceedings for federal court proceedings, for decisions by judges and juries, is going to contribute to the further appearance of partiality that is already an issue,” Cox said during the keynote speech. “It is incumbent on the agency to show it can exercise this discretion wisely.”

Though the SEC has had the ability to bring cases administratively for decades, the Dodd-Frank Act of 2010 gave the agency new powers to file in-house enforcement actions and levy fines against non-regulated entities.

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By : Securex /May 14, 2015 /Compliance, Securites Law /1 Comment