There has been no shortage of speculation about just what prompted the SEC to publish its Enforcement Manual earlier this month. The manual contains detailed policies and procedures that are intended to be “guidance” for the staff of the SEC’s Division of Enforcement, and which appear to memorialize a large number of policies that have developed over decades and have historically been applied on the basis of oral tradition or unpublished memoranda.
Compliance Week’s Melissa Aguilar reports in her Filing Cabinet blog that according to SEC spokesman John Nester, the manual was published based on the SEC’s acceptance of a recommendation in an August 2007 report by the minority staff of the Senate Finance and Judiciary Committees entitled, “The Firing of an SEC Attorney and the Investigation of Pequot Capital Management.”
That report recommends in the Executive Summary (page 7):
Standardized Investigative Procedures: The SEC should draft and maintain a uniform, comprehensive manual of procedures for conducting enforcement investigations, along the lines of the United States Attorney’s Manual. The manual should attempt to address situations or issues likely to recur. It should set a consistent SEC policy where possible and provide general guidance for complex issues that require individual assessment on a case-by-case basis, so that inquiries are handled as uniformly as possible throughout the Enforcement Division.