SEC Proposes Modernizing In-House Court

The U.S. Securities & Exchange Commission (SEC) has voted to propose amendments to how its administrative tribunals operate – including expanding discovery and allowing more time for an in-house tribunal to begin.

The proposed amendments aim to respond to recent criticism over the fairness of the SEC’s administrative proceedings, especially as the enforcement division looks to litigate more complex cases through its in-house tribunal as opposed to the federal court system. Among other things, the proposal seeks to allow witness depositions as part of the discovery process. The proposal also aims to extend the amount of time before an administrative hearing on an enforcement claim takes place.

In addition, the SEC is seeking to require parties to serve notices electronically, and simplify the requirements for appealing an initial decision by an SEC judge. The suggested amendments to the administrative proceedings were made in two separate proposals, and the agency will take comments for 60 days after their publication in the Federal Register. Any approved changes will not become effective until after the commission votes to approve any final versions of the amendments.

We will keep you posted as news develops regarding the proposed changes to the operation of the SEC’s administrative tribunals.

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