When government agencies such as the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) bring charges, their press releases are notorious for their high visibility and inflammatory rhetoric. Within moments, lives are forever altered, reputations destroyed, businesses put on the road to ruin with many livelihoods at risk. What is less understood by the public—though widely known to securities insiders, courts and the commissions—is that sometimes these charges are flimsy, uncorroborated, based on compromised evidence or otherwise warrant a swift settlement when it becomes clear that the agency cannot make its case. In addition, the government can and does overcharge violations hoping some of it will stick.
Unsurprisingly, 98% of SEC cases settle. Fighting a powerful government agency is beyond the means of ordinary Americans. As SEC Commissioner Hester M. Peirce noted in 2018:
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