Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Chamber of Commerce Calls for SEC Enforcement Reforms

Author: Dan Brecher

Date: August 10, 2015

Key Contacts

Back

In a recently published report, the U.S. Chamber of Commerce called for several significant changes to the Securities and Exchange Commission’s or SEC enforcement policies and procedures.

“The recommendations in this report are designed to further strengthen the SEC enforcement program’s ability to detect and deter fraud while also ensuring honest market participants benefit from a clear and fair investigations process,” the report states.

The Chamber’s Center for Capital Markets Competitiveness (CCMC) surveyed more than 75 companies to identify areas of concern, specifically issues resulting from ambiguity or lack of clarity in the SEC enforcement process. The CCMC then consulted more than 30 former SEC officials, legal experts, and corporate counsels to develop specific recommendations.

As we have previously discussed on this blog, the SEC had recently come under fire for using administrative proceedings to secure a “home court” advantage. Other critics have questioned the agency shifting policy regarding admissions.

The CCMC report

In total, the CCMC report contains 28 recommendations for improving the SEC’s enforcement process. Below is a brief summary of the U.S. Chamber of Commerce’s stance on several key issues:

  • Review the SEC’s Rules of Practice in light of the agency’s changed authority,
    increased use of administrative proceedings, and the substantial increase in the volume of investigation materials to ensure that the SEC’s administrative forum is a fundamentally fair and impartial venue, and provide adequate opportunities for pre-trial discovery and depositions.
  • Establish a procedure for respondents to challenge the SEC’s forum choice, as well as a procedure for those seeking a jury trial to remove the proceeding to federal district court.
  • Adopt, and uniformly apply, a “reverse proffer” policy and provide potential defendants/respondents with a full presentation of the nature of its proposed case and the supporting evidence before commencing the Wells submission or white paper process.
  • Adopt a policy that any party that has made a Wells submission or requested advance notice should be provided reasonable advance notice, such as three business days, that the staff will file an enforcement action.
  • Regularly review the SEC’s policy requiring admissions and add a clear statement of the policy to the Commission’s Informal and Other Procedures, which articulates meaningful standards that provide guidance on when admissions will be required and how they will be used in settlement negotiations.
  • Eliminate duplicative and overlapping enforcement responses within the Commission and by multiple enforcement authorities against the same individuals or entities for effectively the same misconduct.
  • Incorporate the use of alternative case resolution methods into the SEC’s “Broken Windows” policy to rapidly resolve minor, non-systemic infractions, and to encourage and reward effective internal compliance and systems of internal controls.
  • New standards, or new interpretations of existing standards, should be addressed through Agency rulemaking or formal interpretive guidance, not through negotiated settled enforcement proceedings.

While the U.S. Chamber of Commerce is the country’s largest business lobby, it is unclear how much attention these recommendations will get from the SEC. We will continue to provide updates on the SEC enforcement policies as they become available.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Why Secured Transactions Are Important post image

Why Secured Transactions Are Important

Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]

Author: Dan Brecher

Link to post with title - "Why Secured Transactions Are Important"
Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications post image

Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications

Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]

Author: Dan Brecher

Link to post with title - "Don’t Cash a “Paid in Full” Check Without Understanding the Legal Implications"
Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors post image

Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors

The One Big Beautiful Bill Act of 2025 (OBBBA) significantly impacts federal taxes, credits, and deductions. A key change relating to Qualified Small Business Stock (QSBS) allows greater tax-free gains for investments in startups and other qualifying small businesses. Company founders and other investors should understand how the enhanced tax strategy works or risk missing […]

Author: Dan Brecher

Link to post with title - "Changes to Qualified Small Business Stock Will Benefit Startup Founders and Investors"
Corporate Consolidation and Antitrust Issues in Mergers post image

Corporate Consolidation and Antitrust Issues in Mergers

Corporate consolidation involves two or more businesses merging to become a single larger entity. The result is often a stronger and more competitive company that can better navigate today’s competitive marketplace. What Is Corporate Consolidation? Corporate consolidation closely resembles a basic merger transaction. The primary difference is that a consolidation creates an entirely new business […]

Author: Dan Brecher

Link to post with title - "Corporate Consolidation and Antitrust Issues in Mergers"
What is Business Law and Why Is it Important? post image

What is Business Law and Why Is it Important?

Business law plays a critical role in nearly every aspect of running a successful enterprise, from negotiating a commercial lease to drafting employee policies to fulfilling corporate disclosure obligations. Understanding what is business law and your legal obligations can help your business run smoothly and build productive relationships with clients, business partners, regulators, and others. […]

Author: Dan Brecher

Link to post with title - "What is Business Law and Why Is it Important?"
Corporate Transactions: Best Practices for Successful Deals post image

Corporate Transactions: Best Practices for Successful Deals

Corporate transactions can have significant implications for a corporation and its stakeholders. For deals to be successful, companies must act strategically to maximize value and minimize risk. It is also important to fully understand the legal and financial ramifications of corporate transactions, both in the near and long term. Understanding Corporate Transactions The term “corporate […]

Author: Dan Brecher

Link to post with title - "Corporate Transactions: Best Practices for Successful Deals"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form. By providing a telephone number and submitting this form you are consenting to be contacted by SMS text message. Message & data rates may apply. Message frequency may vary. You can reply STOP to opt-out of further messaging.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!