When there is an settlement in advance of an SEC administrative proceeding that is about to be brought, the process typically involves the respondent agreeing to a settlement offer that must be approved by the Commission. If the Commission approves the settlement, it will issue an order "deem[ing] it appropriate and in the public interest that public administrative and cease-and-desist proceedings be instituted" against the respondent, and lay out the sanctions agreed upon in the settlement.
Sometimes the Commission will approve a settlement despite a split in the commissioners' vote. Even more rare, however, sometimes a commissioner will write a dissenting opinion and publish it along with the majority's order. That was the case on July 12, when the Commission approved a settlement against Jennifer Kim, a former trader at Morgan Stanley. The Commission's order states that on 32 occasions in a three-month period, Kim and a colleague entered and then cancelled certain orders for the purpose of evading Morgan Stanley's internal risk limits. The order, however, only charged Kim with a books and records violation under Section 13(b)(5) of the Exchange Act. Kim agreed to a fine of $25,000.
In a rare written dissent, Commissioner Aguilar wrote that he considered the settlement to be "inadequate" because off the intentional nature of Kim's conduct. He said that in his view, "the settlement should have included charging Kim with violations of the anti-fraud provisions." The Washington Post reports that based on the APs posted on the SEC's website, there have been only two posted dissents in such cases since 2004.
No comments yet