Articles Tagged with SEC In-house Judges

The US Chamber of Commerce is calling on the U.S. Securities and Exchange Commission make reforms to the way it conducts in-house trials. The Chamber wants the regulator to put into place a uniform policy of when such trials should take place, amend its rules to allow for more pretrial discovery, and set up a process that would let defendants challenge the choice of an in-house venue.

Critics believe that the SEC’s administrative trials violate the Constitution because there is limited discovery and no jury. Depositions are not allowed nor are counterclaims. To appeal a ruling by an administrative law judge, the person has to go to the Commission first before it can go to a circuit court of appeals.

The SEC has increased its use of in-house trials, which are presided over by one of its judges, ever since the 2010 Dodd-Frank Act went into effect. The Chamber of Commerce is concerned that this is causing serious issues of fairness. The lobbying group made nearly forty recommendations, including that the SEC revise certain deadlines and update its rules.

The chamber believes that some of the rules that preside over the SEC in-house court are no longer appropriate for certain complex cases, such as those involving insider trading. It wants more streamlining of investigations, modifications to the Wells notice process, less duplicate efforts among regulators, and clarification of the SEC’s policy regarding admission of guilt in enforcement actions.

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