As discussed here in detail, SEC Commissioner Luis Aguilar’s January 10, 2009 speech entitled, “Empowering the Markets Watchdog to Effect Real Results” included several specific “internal shifts in policy” that he would like to see made immediately to boost the SEC’s ailing Enforcement Division. Another point in the speech, however, that escaped our notice in the prior post (but not that of the American Lawyer’s Ben Hallman) is that Aguilar also called for an expansion of the SEC’s enforcement efforts to include criminal violations. Aguilar stated:
As I have already discussed, federal criminal prosecutions of securities law violations have decreased over the years. I believe that Congress could greatly enhance enforcement of the securities laws by authorizing the Commission to prosecute criminal violations of the federal securities laws where the Department of Justice declines to bring an action. The SEC makes a number of criminal referrals every year that DOJ declines to advance because of resource constraints and other reasons. In fact, there are numerous times where the SEC staff is in a holding period, waiting for the criminal authorities to decide whether they are going to bring a case and, in the interim, the evidence is growing older, and the case is less strong. Providing the SEC with this authority would be an effective way to enhance the federal law enforcement of all securities law violations by expanding the amount of cases that may be brought.