Latest SEC Enforcement Developments

Former members of the SEC’s Division of Enforcement Pravin Rao & Jose Lopez of Perkins Coie discuss the latest SEC enforcement developments, including:

1. Mickelson Case – The long-sought insider trading case involving big golfer Phil Mickelson was finally brought. This truly is a high profile case considering Mickelson is so well known & the gambler involved is the most successful gambler in the US. The kicker for our community is that Mickelson got his trading tips from this gambler who routinely got inside information from a board member – over a period of five years! Mickelson won’t be brought up on criminal charges (his civil charges named him as a “relief defendant”) – but the director is (and already has pleaded guilty)! Not just the usual civil stuff from the SEC. Great story to tell your directors to scare them straight.

2. ALJ Controversy – In early June, the Second Circuit – in Tilton v. SEC – joined the recent Seventh and DC Circuit decisions (Bebo v. SEC and Jarkesy v. SEC) by finding that constitutional challenges to the SEC’s administrative law judge proceedings can’t go forward in court until those proceedings are done. In other words, a court review can only be sought as an appeal from a final decision by an ALJ.

The Eleventh Circuit now is the last court out there with a pending case (Hill v. SEC) that could possibly create a circuit split – so it looks unlikely that the Supreme Court would decide to weigh in. We’ve posted memos on the Tilton & other decisions in our “SEC Enforcement” Practice Area.

3. Working at the SEC – For those curious what it’s like working at the SEC.

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