SEC Opinions Underused by Enforcement Targets, Official Says

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By Rob Tricchinelli

Parties accused of wrongdoing by the SEC don’t take full advantage of the commission’s opinions in guiding their defense, a top agency enforcement official said Feb. 24.

As it handles enforcement cases, the Securities and Exchange Commission often issues legal opinions, which cover many areas of securities laws that federal-court cases don’t reach as frequently.

“It’s really a missed opportunity to not be aware of what they are,” Joseph K. Brenner, chief counsel in the SEC’s Enforcement Division, said at a panel during the Practising Law Institute’s “SEC Speaks” event in Washington.

Legal Opinions

SEC enforcers bring many cases before administrative law judges, and appeals from that forum are decided by the commissioners. When the commissioners weigh in, they release often lengthy legal opinions in support of their decision. They also review enforcement actions brought by the Financial Industry Regulatory Authority.

The opinions fall “across a spectrum of securities laws” and it’s “a little puzzling to me” that accused wrongdoers don’t cite agency opinions more in carrying out their defense, Brenner said.

The agency, for example, has issued several recentopinions on securities-law violations that are based on negligence claims, he said.

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To contact the editors responsible for this story: Phyllis Diamond at; Seth Stern at

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