White Says SEC Ready for More Trials Prompted by Admissions PushDave Michaels
The U.S. Securities and Exchange Commission is prepared for a potential increase in trials resulting from its move to seek tougher settlements from defendants, the agency’s chairman said.
Mary Jo White said in Washington yesterday that the SEC welcomes the prospect of more trials, which can enhance public accountability by airing “a full factual record of wrongdoing.” White cited similar reasons when she announced in June that the SEC would seek admissions of wrongdoing in more settlements of its enforcement cases.
“Some have asked whether the agency’s trial lawyers are ready to go up against the best of the white-collar defense bar,” White, a former U.S. attorney and litigator, told an audience at the E. Barrett Prettyman U.S. Courthouse. “It will probably come as no surprise to you, but my answer is a resounding yes, we are prepared to do that.”
The SEC has obtained admissions of wrongdoing in several enforcement cases since White made her June announcement. Her policy of seeking admissions of wrongdoing marked a change from the practice of regularly settling cases by allowing defendants to neither admit nor deny fault.
The regulator has obtained admissions of wrongdoing in settling cases against defendants Philip Falcone and JPMorgan Chase & Co. Falcone, a hedge-fund manager, was accused of improperly borrowing money from his fund to pay his personal taxes and giving preferential treatment to some of his investors in returning their money. JPMorgan admitted in September that it violated securities laws when it failed to catch London-based traders hiding losses in 2012.
“I altered the policy because I believe that in certain cases, more may be required for a resolution to achieve public accountability and to be, and viewed to be, a sufficient punishment to send a strong message of deterrence,” White said today. “Not a trial, but some extra measure of public accountability.”