If money penalties are used judiciously as part of an overall package of remedies they can be what Congress intended – and effect additional weapon in the SEC’s arsenal. Professor Coffee’s proposal would, however, make them the primary focus of presumably some of the Commission’s most important enforcement actions. This simply misses the mark. It would refocus enforcement actions from halting violations, preventing a reoccurrence and protecting investors and the markets to a quest for more and more dollars to fund the contingent fee. That is not what SEC enforcement is about.
The success of SEC enforcement in the future depends on the prudent use of all its weapons. The Enforcement program has undergone a dramatic transition in recent years, overcoming significant obstacles in most difficult times. If it is to continue on the path to success the focus must be on meaningful remedies to protect investors and the markets in the future, not funding contingent legal fees.
‘Enforcement 40’ for 2020
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