On Wednesday, SEC Director of Enforcement Andrew Ceresney stated during a D.C. Bar luncheon program on SEC enforcement developments and priorities that although it has historically been rare for the SEC to file insider trading cases as administrative proceedings, "I think there will be more going forward." 

The SEC has suffered a number of losses in federal court trials in its FY 2014, including two recent insider trading losses in a span of 7 days. Ceresney told the attendees that the potential shift to filing more insider trading cases as APs (cease-and-desist proceedings brought before an SEC administrative law judge rather than in federal court) was not a reaction to recent losses, however. Reuters reports that Ceresney confirmed the SEC would continue to file insider trading cases in federal courts, as well, because it can seek higher penalties in federal court. 

Filing insider trading cases in APs has been a more attractive option for the SEC following the passage of the Dodd-Frank Act. Prior to Dodd-Frank, the SEC's authority to impose penalties in APs was restricted to regulated entities such as broker-dealers, investment advisers, and mutual funds. Section 929P of Dodd-Frank, however, gave the SEC authority to impose a civil penalty in an administrative proceeding against any person or company. In addition, APs have always afforded the SEC with the perceived "home court" advantage of being presided over by an SEC administrative law judge and having an appeals process that takes defendants before the same Commission that approved the case against them in the first place. In addition, APs provide defendants with limited discovery and no possibility of a jury. 

Despite the ability to seek penalties for insider trading in APs, the SEC presently files almost all of its insider trading cases in federal court. In one high-profile insider trading case against Rajat Gupta in 2011, the SEC did file the matter as an administrative proceeding. Gupta, however, convinced Judge Jed Rakoff to dismiss the AP, arguing that the SEC was treating him differently than 28 other related defendants (who were sued in federal court). The SEC then refiled the case against Gupta in federal court.

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