The Securities and Exchange Commission (SEC) in February announced what it billed as significant updates to the manual that governs SEC investigations and litigation. These updates encourage staff to share evidence with those they propose to charge and aim to ensure parties can thoroughly explain to senior SEC officials why they shouldn’t bring a case.
SEC Chairman Paul S. Atkins called the revisions an “important and long-overdue step” toward greater transparency, fairness and due process. The changes are welcome news for any corporation that has found itself in the SEC’s crosshairs. In some ways, the amendments echo and complement SEC v. Jarkesy, the US Supreme Court’s 2024 landmark decision guaranteeing those the SEC accuses of fraud the right to a jury trial before an impartial district court, rather than an administrative trial before the SEC.
But, as Milbank LLP Litigation & Arbitration partner George Canellos discusses in an article for Bloomberg Law, these updates will fall short of giving companies a real opportunity to have their day in court unless the SEC or Congress revisits the securities laws’ so-called “bad actor” provisions.
Read “SEC Litigation Enforcement Should Give Firms Their Day in Court” here.
