Uncommon Experience

Knowledge Creativity Integrity...

Experience Matters

The SEC is an independent commission staffed mainly with lawyers and accountants that is charged with protecting investors in the American financial markets.  Since its formation in 1934, the SEC has developed its own internal policies, rules and customs for the enforcement of the federal securities laws.  Practitioners without insight into the Commission’s bureaucratic traditions may run serious risks of not obtaining the best possible results for their clients.  

The Commission is divided into divisions and offices, each with their own turf to protect.  Recommendations made by the Enforcement staff (called “Action Memos”) must be reviewed by the each of the divisions impacted by the recommendation and, by the Office of the General Counsel, before being presented to the Commission for approval at a closed Commission meeting.  More than 40 staff members at various levels of seniority evaluate every enforcement recommendation before it is put to a Commission vote.  The bureaucratic proclivities of each affected group may radically change the recommendation presented to the Commission or delay its progress for extensive periods of time.  Practitioners with insight into these internal considerations may better understand how to shape the results for their particular client.


Photograph of the courthouse of Southern District of Mississippi, Western Division, in Natchez, Mississippi.  The building  was originally constructed in 1853 as a place for events and performances for the adjacent Natchez Institute School. In 2007, it was renovated and repurposed as a federal courthouse. The building is a rare example of a nineteenth century Greek Revival auditorium. It was listed in the National Register of Historic Places in 1979. The courthouse was also the venue for SEC v. USSE, Rivera, et al., Case 5:08-cv-245 (S.D. Miss, May 12, 2012)

Rivera Final Judgment


For example, the Office of the Chief Counsel of the Division of Enforcement reviews most recommendations to make sure that the legal remedy sought and the recommended relief fit neatly within the matrix of the Commission’s policies and prior decisions, but experienced practitioners may better understand the internal considerations that support a variance from prior practice in specific instances. Other divisions, Corporate Finance, Investment Management, Trading and Markets, the Office of Compliance Inspections and Examinations, the Office of the Chief Accountant and others, review those aspects of each recommendation that touch the particular concerns of their subject areas. Their internal considerations may narrow the scope of the action brought, change the wording of specific charging documents and, in a few cases, result in killing the claim. Practitioners with prior SEC experience may often be able to shape their client’s defenses to take these bureaucratic idiosyncrasies into account. Practitioners without that experience may not know what defenses they may be missing.

The cherry on top of the cupcake is the Office of General Counsel, which is charged with, among other things, the responsibility for making sure that enforcement recommendations are consistent with the theories of the Commission’s legal policies and prior decisions. The Office of the General Counsel’s Office is staffed with appellate lawyers, policy advisers and legal theoreticians often with little practical litigation experience. They may limit charges or legal arguments based on theoretical issues that yet have not been raised in actual cases. In rare instances, recommendations, which included consents by the proposed defendants to the relief sought by staff, have return to the enforcement staff with instructions to go back to the proposed defendants and give them a better deal. Experienced practitioners may know better how to use these practical and theoretical issues for their client’s benefit. Moreover, in settlement negotiations, experienced practitioners better understand the basis for varying settlement standards. Practitioners without prior SEC experience, in some instances, may not know what more limited terms they can really ask for their clients in specific cases.

Alex Rue has 22 years of experience investigating, recommending, litigating and settling SEC enforcement actions. He is better suited than most to obtain a favorable result for his clients.

TEL: 404-808-1397

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4060 Peachtree Road
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