The SEC opened its proceedings to become more like a traditional courtroom instead of a genteel boardroom.
In response to criticisms from practitioners and the media, the SEC announced last week its adoption of certain amendments to the rules governing its administrative proceedings. These amendments are set to eliminate what critics call as the SEC’s “home field advantage” and various other constitutional challenges.
The National Law Review summarized the most important of these amendments, which include:
* Extension of Timeline. The proposal expands the deadlines for administrative proceedings, in part by expanding the “prehearing period” — the time between service of the initial order instituting proceedings and the hearing on the merits before the ALJ…
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* Expansion of Discovery. The SEC agreed to incrementally expand the availability of depositions in administrative proceedings. It had initially proposed to allow each side in complex cases the right to notice three depositions per side in single-respondent cases and five depositions per side in multi-respondent cases. However, the final rule also adds a provision permitting each side to request an additional two depositions “under an expedited procedure.”
* Motions for Summary Disposition. The SEC will amend Rule 250, regarding motions for summary disposition, to further specify three types of dispositive motions that can be filed at different states and to set standards governing each type of motion. This amendment does not appear to have been contemplated in the initial proposed rules.
Other provisions in the amendments are largely similar to initial proposals, including requiring respondents to disclose “reliant” defenses and certain disclosures pertaining to expert witnesses and reports, as well as excluding hearsay and other unreliable or irrelevant evidence.
Comments about the amendments said that while the final proposals are representative of steps towards the right direction, they are still “woefully inadequate”.
