In the face of criticism for its failure to uncover and end certain recently publicized, notorious conduct, the Securities and Exchange Commission has been flexing its muscles aggressively—sometimes in a manner that raises questions about whether the legislation that empowers it stretches as far as the agency believes. For example, although the Dodd-Frank Act expands the SEC’s ability to seek administrative penalties against non-regulated persons, a recent lawsuit by Rajat Gupta, a former Goldman Sachs director alleged by the SEC to have provided inside information to Raj Rajaratnam, the Galleon Group founder currently on trial in the Southern District of New York, questions whether the administrative proceeding initiated by the agency against Mr. Gupta improperly applies the Dodd-Frank Act retroactively and deprives him of his right to a jury trial and other procedural safeguards offered in federal court.1 This action raises a host of contested issues about the SEC’s expanded power that will be addressed in the coming months.
A more often debated—yet still murky—topic is the nature of the statute of limitations that applies to SEC enforcement actions in cases alleging fraud. Starting in the mid-1990s, federal courts have ruled that the five-year limitation set forth in 28 U.S.C. §2462 applies to penalty claims by the SEC. Since then, an unhappy SEC has attempted to find ways to expand that limitation.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
