The reasoning of this decision cannot be left unchallenged…. So what might the SEC do? It could seek voluntary dismissal and refile (and settle) the case as an administrative proceeding. That, however, would leave the legal analysis in Citigroup unchallenged. The Commission could seek reconsideration of the decision and, in the alternative, an interlocutory appeal. The trial court will not reverse his decision but with a spirited challenge he may at least narrow the holding. The same is true with respect to an appeal. Moreover, it would seem likely that the Justice Department and other federal agencies that rely on a similar approach (and similar language) would support the challenge. Certainly, such a united approach would, at a minimum, send a message to other judges that the SEC does not intend to accept this sort of reasoning.
‘Enforcement 40’ for 2020
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