What do the Hampshire Constabulary, Texas Railroad Commission, City of Chicago, and the FBI have in common? One answer is that the U.S. Securities and Exchange Commission thanked each of them for assisting the agency in a securities enforcement action. My article, Enforcement Networks, takes advantage of this routine practice to develop a novel approach to quantifying how networks of domestic and international agencies coordinate in civil enforcement. It maps agency coordination through more than 20 years of SEC acknowledgments. Continue reading
Tag Archives: Verity Winship
Disgorgement After Kokesh – Evidence from SEC Insider Trading Actions (FY2005-FY2015)
For about 50 years – at least since Texas Gulf Sulphur – the SEC has ordered defendants to disgorge their profits from transactions that violated the securities laws. Despite disgorgement’s long history, in its 2017 opinion in Kokesh v. SEC (PDF: 102 KB), the US Supreme Court put two aspects of the remedy on the table. It applied a five-year statute of limitations to disgorgement. It also reopened old debates over agencies’ power to seek remedies not specified in statute. My article, Disgorgement in Insider Trading Cases: FY2005-FY2015, provides data to inform these debates over the agency’s use of disgorgement and the effects of Kokesh. It reports the results of an empirical study of ten years of the remedies ordered by the SEC in insider trading actions, with particular emphasis on the agency’s reliance on disgorgement. Continue reading
Admitting Wrongdoing to the SEC: An Empirical Study of Admissions in SEC Settlements
by Verity Winship and Jennifer K. Robbennolt
What is the connection between what the SEC actually does and what it says it will do? In 2013, the SEC unveiled a new policy requiring some enforcement targets to admit wrongdoing when they settled with the agency. In An Empirical Study of Admissions in SEC Settlements, we analyze settlements from before and after the introduction of this policy to determine how the SEC’s practice lines up with its new approach to admissions. We find an uptick of admissions following the policy announcement, with the highest number in FY2016. Using an inclusive definition of admissions, we identify fewer than one hundred settlements containing admissions that were announced during the seven years of our study (FY2011-FY2017). Continue reading
Denials and Admissions in Civil Enforcement – Looking Beyond the SEC
by Verity Winship and Jennifer K. Robbennolt
Should agencies require admissions of guilt from the targets of civil enforcement? The SEC’s policy of letting enforcement targets settle while neither admitting nor denying allegations provoked judicial rebukes and a public debate. But the SEC is only the tip of the iceberg. Administrative agencies rely heavily on settlement as a key enforcement tool. Admissions of guilt—or, more commonly, declarations that nothing is admitted—form part of these settlement agreements and the underlying negotiations.
Our recent article, Admissions of Guilt in Civil Enforcement, uses the explicit debate over the SEC’s practices to draw attention to the high (and mostly unexamined) stakes of admissions for civil enforcement throughout the administrative system. Continue reading