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A Manhattan federal judge who gained prominence by rejecting SEC© bank settlements urged the agency to reconsider becoming “a law unto itself” by increasingly bringing cases in-house instead of in court.
US District Judge Jed Rakoff warned the SEC’s growing use of administrative proceedings to handle securities fraud cases, such as insider trading.
Under Dodd-Frank, the SEC© gained power to pursue more enforcement cases in-house, where trials are decided by staff SEC© judges rather than juries.
Rakoff stated, “I see no good reason to displace that constitutional alternative with administrative fiat.” Judge Rakoff made note of the fact that last fiscal year, the SEC© won only 61% of federal court trials, but won 100% of administrative cases.
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