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SEC Will Not Appeal Court Loss

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  • Baker, John
    The Securities and Exchange Commission announced today that it will not appeal the adverse decision by the U.S. Court of Appeals for the D.C. Circuit, which on
    Message 1 of 1 , May 14 2:24 PM
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      The Securities and Exchange Commission announced today that it
      will not appeal the adverse decision by the U.S. Court of Appeals for
      the D.C. Circuit, which on March 30 ruled against an SEC rule excepting
      some broker-dealers from regulation as investment advisers. Press
      Release No. 2007-95 (May 14, 2007). Most observers had expected the SEC
      to seek an en banc rehearing by the full court. The SEC said it instead
      would ask for a 120-day stay of the court's ruling to allow investors
      and their brokers to respond. According to the SEC, the court ruling
      affects an estimated one million brokerage accounts, holding an
      estimated $300 billion in assets. The SEC said it will consider whether
      further rulemaking or interpretations are necessary regarding the
      application of the Investment Advisers Act of 1940 to these accounts and
      the issues resulting from the court's decision.

      SEC Chairman Christopher Cox also announced that he has approved
      additional emergency funding to accelerate an on-going RAND Corporation
      study of the marketing, sale, and delivery of financial products and
      services to investors, allowing the study to be delivered by December
      2007, several months ahead of schedule. The study is intended to provide
      an empirical foundation for considering improvements in regulatory and
      legislative rules in this area.

      The SEC did not explain the reasons for its decision. Although
      independent observers thought the SEC had a plausible case for an
      appeal, en banc rehearings are rarely granted. The SEC's other option
      for appeal was to petition the Supreme Court for certiorari, but this
      can be done only by the Solicitor-General. It is not known whether the
      SEC approached the Solicitor-General's office for a possible appeal.

      The SEC press release is available online at

      http://www.sec.gov/news/press/2007/2007-95.htm

      For my prior post on the court's decision, see

      http://groups.yahoo.com/group/FundLaw/message/1124


      John M. Baker <JMB@...>
      Stradley Ronon Stevens & Young, LLP http://www.stradley.com
      1220 19th Street NW, Suite 600
      Washington DC 20036
      202.419.8413
      202.822.0140 fax
      FundLaw Listowner http://groups.yahoo.com/group/fundlaw
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