Business and the Law; The New Powers Of the S.E.C.
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THE rules of enforcement are changing for the Securities and Exchange Commission. Fortified by its success in persuading Congress to give it broader powers, the commission is preparing procedures to handle many cases within the agency that previously had been taken to the Federal courts. Last year Congress approved the Securities Enforcement Remedies Act, which gives the agency the authority to impose monetary sanctions and issue more significant orders instead of relying on Federal judges. The legislation permits it to hear a wider variety of actions, including illegal insider trading cases and stock manipulation. It has led the S.E.C. to begin writing procedures to permit its administrative law judges to consider cases traditionally reserved for Federal district judges. “It is the single most dramatic change in enforcement in the history of the agency,” said Harvey L. Pitt, a securities lawyer in the Washington office of Fried, Frank, Harris, Shriver & Jacobson, who served as the general counsel at the S.E.C. in the 1970’s. In the past, most cases before the administrative law judges have been smaller actions involving brokers, securities dealers and investment advisers accused of such offenses as churning accounts and not keeping books and records in proper order. The commission’s lawyers fare significantly better before the administrative law judges, where they almost always win, than they do in the Federal courts, where they succeeded in only two-thirds of the cases adjudicated last year. More : query.nytimes.com |