Alix Stuart, CFO.com | US
December 21, 2009
"She also overturned the policy of...requiring commission approval for levying financial penalties against public companies."
First, it was a pilot project with limited application, not a policy. Second, if the Commission doesn't approve future penalties, they're likely to run into a constitutional problem or two. The question was whether it made sense for the Commission to let the staff know what it thought an appropriate penalty might be either (A) before negotiations, or (B) after negotiations. The pilot tested A. It turned out that the staff liked B better. So the pilot program was ended. More significant than internal procedural timing is the standard for penalties itself, described at http://www.businessweek.com/bwdaily/dnflash/jan2006/nf2006015_7863_db038.htm as: "'MASTERFUL JOB.' The SEC's new guidelines come out solidly behind penalties. 'The chairman did a masterful job in bringing the commission to a unified position loudly and expressly' in favor of fines, says Stephen Cutler, who directed the SEC Enforcement Div. under Donaldson and is now a partner at the law firm WilmerHale."
Posted by Paul Wilkinson | Dec 23, 2009 11:04 PM ET
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