What You Need to Know about the SEC’s New Rules for Administrative Proceedings
The Securities and Exchange Commission (SEC) recently adopted several amendments to its rules of practice governing administrative proceedings. According to the agency, the rule changes are “intended to update the rules and introduce additional flexibility into administrative proceedings.”
The Dodd-Frank Act gave the SEC greater authority to bring enforcement actions via administrative proceedings. The SEC has used its newfound power to bring significant cases before its own hearing officers rather than federal judges or independent juries. Critics argue that the rules governing administrative proceedings give the SEC an unfair home court advantage.
The SEC’s amendments
The SEC initially proposed the amendments last September. While the public comments the agency received were largely positive, many also noted that further changes should be made to the rules of practice for SEC administrative proceedings. Nonetheless, they are a step in the right direction. Below are the key changes under the SEC’s final rules:
Initial decision of hearing officer and timing of hearing (Rule 360): Under amended Rule 360, orders instituting proceedings would designate the time period for preparation of the initial decision as 30, 75 or 120 days from the completion of post-hearing or dispositive motion briefing or a finding of a default. Amended Rule 360 would also extend the length of the pre-hearing period from the current four months to a maximum of 10 months for cases designated as 120-day proceedings, a maximum of six months for 75-day cases, and a maximum of four months for 30-day cases.
Depositions upon oral examination (Rule 233): Amended Rule 233 would permit parties in 120-day proceedings the right to notice three depositions per side in single-respondent cases and five depositions per side in multi-respondent cases, and would permit each side to request an additional two depositions under an expedited procedure.
Answer to allegations (Rule 220): Amended Rule 220 would require a respondent to disclose in its answer to an order instituting proceedings whether the respondent is asserting any “reliance” defense and whether the respondent relied on the advice of counsel, accountants, auditors, or other professionals in connection with any claim, violation alleged, or remedy sought.
Dispositive motions (Rule 250): Amended Rule 250 would provide that three types of dispositive motions may be filed at different stages of an administrative proceeding and would set forth the standards and procedures governing each type of motion.
Evidence (Rule 320): Amended Rule 320 would exclude evidence that is irrelevant, immaterial, unduly repetitious, or unreliable and would provide that hearsay may be admitted if it is relevant, material, and reliable.
The amendments will become effective 60 days after publication in the Federal Register and will apply to all proceedings initiated on or after that date.
Does Your Homeowners Insurance Provide Adequate Coverage?
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Understanding the Importance of a Non-Contingent Offer
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Novation Agreement Process: Step-by-Step Guide for Businesses
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
What Is a Trade Secret? Key Elements and Legal Protections Explained
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
What Is Title Insurance? Safeguarding Against Title Defects
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
SEC Adopts New Rules for Administrative Proceedings
Author: Dan Brecher
What You Need to Know about the SEC’s New Rules for Administrative Proceedings
The Securities and Exchange Commission (SEC) recently adopted several amendments to its rules of practice governing administrative proceedings. According to the agency, the rule changes are “intended to update the rules and introduce additional flexibility into administrative proceedings.”
The Dodd-Frank Act gave the SEC greater authority to bring enforcement actions via administrative proceedings. The SEC has used its newfound power to bring significant cases before its own hearing officers rather than federal judges or independent juries. Critics argue that the rules governing administrative proceedings give the SEC an unfair home court advantage.
The SEC’s amendments
The SEC initially proposed the amendments last September. While the public comments the agency received were largely positive, many also noted that further changes should be made to the rules of practice for SEC administrative proceedings. Nonetheless, they are a step in the right direction. Below are the key changes under the SEC’s final rules:
Initial decision of hearing officer and timing of hearing (Rule 360): Under amended Rule 360, orders instituting proceedings would designate the time period for preparation of the initial decision as 30, 75 or 120 days from the completion of post-hearing or dispositive motion briefing or a finding of a default. Amended Rule 360 would also extend the length of the pre-hearing period from the current four months to a maximum of 10 months for cases designated as 120-day proceedings, a maximum of six months for 75-day cases, and a maximum of four months for 30-day cases.
Depositions upon oral examination (Rule 233): Amended Rule 233 would permit parties in 120-day proceedings the right to notice three depositions per side in single-respondent cases and five depositions per side in multi-respondent cases, and would permit each side to request an additional two depositions under an expedited procedure.
Answer to allegations (Rule 220): Amended Rule 220 would require a respondent to disclose in its answer to an order instituting proceedings whether the respondent is asserting any “reliance” defense and whether the respondent relied on the advice of counsel, accountants, auditors, or other professionals in connection with any claim, violation alleged, or remedy sought.
Dispositive motions (Rule 250): Amended Rule 250 would provide that three types of dispositive motions may be filed at different stages of an administrative proceeding and would set forth the standards and procedures governing each type of motion.
Evidence (Rule 320): Amended Rule 320 would exclude evidence that is irrelevant, immaterial, unduly repetitious, or unreliable and would provide that hearsay may be admitted if it is relevant, material, and reliable.
The amendments will become effective 60 days after publication in the Federal Register and will apply to all proceedings initiated on or after that date.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
