While the U.S. Securities and Exchange Commission is referring more enforcement cases to its in-house court, that may be adding to a logjam of appeals before commissioners.
Using enhanced powers granted under the Dodd-Frank financial reform law, the SEC has stepped up its use of the in-house court as a fast-track alternative to the federal courts since Mary Jo White took over as chair in 2013.
But according to the Wall Street Journal, the median time for the agency to decide appeals of the in-house judges’ decisions has increased to 19 months — almost double the median times under White’s two main predecessors, Christopher Cox and Mary Schapiro.
“The wait for a ruling on appeal can be interminable and can also disadvantage defendants,” Joseph Grundfest, a former SEC commissioner who is a law professor at Stanford University, told the WSJ.
The SEC’s own target is to decide appeals between seven and 11 months after a filing. But it has met the 11-month goal in only about one in five of the decisions under White’s leadership, the Journal’s analysis found.
Critics say the SEC’s judicial approach “means defendants often lose both ways,” the Journal said. “The trial portion of the civil case moves much more quickly than such matters typically would in federal court, giving limited time to prepare for trial, and defendants then can wait years for the SEC to decide appeals.”
The agency says the resolution of cases has speeded up this year. Further, in September, it proposed a new target that would give commissioners between eight and 10 months to decide appeals. The clock would start when the briefs on the appeal are completed, rather than when the appeal is filed.
Some people close to the agency said some delays can be caused by defendants, such as when they make requests for extra time. Most defendants are “blowing smoke” about delays and often want the process to drag on to avoid the coming punishment, James Cox, a law professor at Duke University, told the newspaper.