SEC Enforcement: SEC Issues Guidance on Approach to Forum Selection in Contested Actions

Sullivan & Cromwell LLP - May 11, 2015

The SEC’s Division of Enforcement has issued guidelines explaining the factors it will consider in determining whether to bring enforcement actions as administrative or judicial proceedings.  The SEC recently has been criticized for its increased use of administrative proceedings to resolve novel applications of the securities laws.  In the newly issued guidance, the Division identified a non-exhaustive list of four factors that the Division may consider in determining the proper forum for an enforcement action, but the Division also made clear that the circumstances of each particular case will ultimately govern where the case is brought.  The Division reiterated its view that it may prefer administrative hearings as the venue for resolving novel or complex applications of the federal securities laws.