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Aguilar Calls for Clarity in Enforcement Orders

Commissioner Luis Aguilar released a statement this week urging the Commission to take care to be as clear as possible when it issues enforcement orders. Aguilar suggested that “[o]ne of the Commission’s most effective deterrents against future misconduct is what it says about the enforcement actions it takes.” While Aguilar acknowledged that the contents of orders are often the subject of settlement negotiations, he argued that they should “contain sufficiently detailed facts so that there is no doubt as to why the Commission brought an enforcement action, why the respondent deserved to be sanctioned, and why the Commission imposed the sanctions it did.” With a clear order, the Commission can “send the right message, help[] maximize the deterrent effect of enforcement actions, and, just as important, inform[] others as to future behavior.

Aguilar argued that the need for clarity is especially acute with orders involving violations by CCOs, who “exist in large part to implement and enforce policies and procedures to prevent federal securities law violations in the first place.According to Aguilar, recent concerns about actions against CCOs “may be attributed, at least in part, to Commission Orders that could have been clearer and more fulsome.”

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