Respondents in SEC enforcement actions increasingly will litigate a wide array of matters in administrative proceedings, rather than having their day in federal district court.
In the wake of significant public attention — including a fair amount of criticism — regarding the Securities and Exchange Commission’s increased use of administrative proceedings to enforce the federal securities laws, the SEC’s Division of Enforcement recently issued written guidance setting forth the considerations that generally inform its forum selection for enforcement actions. The Division of Enforcement Approach to Forum Selection in Contested Actions prescribes four broad factors that the Division may consider in deciding whether to seek to enforce the securities laws through a civil action in federal district court or an administrative proceeding before an SEC Administrative Law Judge (ALJ).
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