Section 929U of the Dodd-Frank Act provides:

Not later than 180 days after the date on which Commission staff provide a written Wells notification to any person, the Commission staff shall either file an action against such person or provide notice to the Director of the Division of Enforcement of its intent to not file an action.

The same statute also provides an exception which allows the deadline to be extended in certain circumstances.

In SEC v NIR Group LLC, E.D.N.Y., CV 11-4723, the defendants sought certain discovery regarding the SEC’s compliance with Section 929U of the Dodd-Frank Act.  The court held the discovery was neither relevant nor reasonably calculated to lead to admissible evidence.

The court found the deadline in 929U imposes only an internal deadline on the SEC and not a right to be free from any agency action occurring beyond the internal deadline.

The court noted that the targets of an SEC probe that extended beyond the deadline may well be entitled to initiate an administrative proceeding or file a declaratory judgment action to compel agency action.

Check dodd-frank.com frequently for updated information on the JOBS Act, the Dodd-Frank Act and other important securities law matters.