October 12, 2018

SEC Challenged by Disgorgement Time Limits, Reduced Staffing

Chicago partner Jim Lundy commented for a Fundfire article titled “SEC Challenged by Disgorgement Time Limits, Reduced Staffing.” In the article, Jim discussed the obstacles confronting SEC Enforcement staff in implementing enforcement actions and pursuing disgorgement from these actions.

Following a June 2017 Supreme Court decision, which established a strict five-year statute of limitations for disgorgement, the agency has faced considerable pressure to wrap up investigations more quickly, while working with limited resources. Jim, who held supervisory roles in the SEC’s Enforcement Division and Office of Compliance Inspections and Examinations, addressed the recurring discussion surrounding staffing and resources, and the impact of limited resources on the attorneys: “In terms of the work staff attorneys are doing on a day-to-day basis I don’t believe [resource constraints] directly affect their work,” but, “[i]t absolutely affects their morale. It affected my morale while I was there.”

A report issued by the inspector general identified key priorities for the SEC, including the collection of disgorgement. Jim observed that “senior management in the home office and the very senior management in the regions take [the reports] very seriously,” though “what they’re doing on top does not always necessarily work its way down to the line enforcement staff attorneys.”

Read “SEC Challenged by Disgorgement Time Limits, Reduced Staffing.” (log-in required)

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