The SEC recently dropped 42 enforcement actions — including many against small investment advisors — as a result of the SEC’s failure to separate the enforcement and judicial functions in its administrative proceedings.
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Concannon and Wolfe explain the significance of the SEC’s breach and how the agency has not fixed the underlying problem: the fact that the “judge” and the “prosecutor” in SEC administrative proceedings sit under the same roof when deciding enforcement matters against IAs, BDs and others.
“In total, we’re now looking at over 100 cases in which the SEC enforcement staff, the prosecutors … had access to the judges’ memos,” Wolfe explains.
“This is a disaster for the SEC,” according to Wolfe.
Source: 42 Dropped Cases, 48 Lifted Bars, One Big ‘Disaster’: SEC Roundup | ThinkAdvisor
