Friday, March 18, 2011
Sutherland Asbill & Brennan LLP recently announced the results of its 2011 Sutherland SEC/FINRA Litigation Study – an annual review of the litigated cases brought by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) against broker-dealers and associated persons. The study finds that at least in some cases it paid to fight SEC and FINRA charges, particularly in cases involving fraud.
Highlights from the study include:
• Of the 237 charges that were litigated by the SEC and FINRA and resulted in SEC Administrative Law Judge (ALJ) or FINRA Hearing Panel decisions during FY 2009 and FY 2010, respondents succeeded in getting approximately 13% of the charges dismissed.
• FINRA respondents with counsel are significantly more successful than pro se respondents.
• SEC staff failed to prove fraud charges approximately 57% of the time in FY 2009-2010.
• When SEC and FINRA respondents were found to have been liable for one or more charges, 33% of the time the ALJ or the Hearing Panel imposed monetary sanctions that were lower than the staff sought at the trial.
• When cases were appealed from SEC ALJs to the full Commission, 33% of SEC respondents were successful in getting reduced sanctions
The study is available at the firm's website.