It’s hard to argue with a regulatory agency seeking more flexible penalties for carrying out a regulatory mandate. But the approval with which SEC watchers generally greeted the policy may be premature, for it’s not likely to further SEC enforcement objectives. On the one hand, this may little more than a cosmetically deft finesse of all the judicial and political pressure on the SEC to achieve better results in enforcement actions, especially those arising from the 2008 financial system collapse. If so, as even the SEC has suggested, most companies will continue to settle using the standard neither-admit-nor-deny formula, and the SEC’s enforcement business will continue to be done pretty much as usual. But on the other hand, if the SEC requires more than a token number of companies to admit liability, the winners will not be the investing public but plaintiff class action lawyers.
‘Enforcement 40’ for 2020
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