If adopted, the net effect of Ms. Schapiro’s proposal would give the S.E.C. the authority to seek significantly higher financial penalties for violations without ever having to resort to a federal district court by pursuing cases in administrative proceedings. That means future cases involving charges similar to those against Citigroup will not have to go before someone like Judge Rakoff, who was critical of the lack of any admission of wrongdoing in the proposed settlement…. But allowing the S.E.C. to bypass the federal courts in virtually any case in which it may seek substantial penalties raises serious questions about the fair treatment of defendants. There is certainly something to be said for giving a defendant his or her day in court, especially if the potential penalty could run into the millions of dollars.
‘Enforcement 40’ for 2020
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