Since the appointment of U.S. Securities and Exchange Commission Chair Mary Schapiro, and her selection of former federal prosecutor Robert Khuzami to head the Enforcement Division, SEC enforcement cases have picked up. But some believe that civil regulators should be vested with more power: authority to bring federal criminal cases. This controversial idea, floated in recent months by commissioners at the SEC and the Commodities Futures Trading Commission (CFTC), likely faces many hurdles.
On March 18, SEC Commissioner Luis Aguilar spoke to a meeting of lawyers where he made a number of proposals intended to streamline and intensify the SEC’s enforcement process. Included was the suggestion that the SEC should have the power to bring criminal cases, as a “standby” or backup remedy, limited to cases “where the Department of Justice has declined to do so.” Aguilar’s position followed on the heels of a similar idea from CFTC Commissioner Bart Chilton. In a Feb. 10 speech he pointed to the complexity of Commodities Exchange Act (CEA) cases, the scarce resources of Department of Justice prosecutors and the difficulty of coordinating civil and criminal investigations among agencies as reasons to give the CFTC standby criminal authority, too.
