At the recent SEC Speaks conference, SEC Commissioner Luis Aguilar called for an end to the practice of some SEC defendants following settlements to argue that "the conduct was really not that bad or that the regulator over-reacted."  I asked if readers could send me examples of such press releases, and last week I passed along a January 11, 2011 press release issued by Charles Schwab.

This week I learned of another example that I want to pass along. On January 21, 2011, Richard White, a former vice president with World Fuel Services Corp., settled the SEC's insider trading charges. White reportedly agreed to pay $11,742 in disgorged profits and civil penalties as part of the settlement. Like all defendants settling an SEC action, White did so "without admitting or denying" the allegations in the SEC's complaint.

In a Law 360 article published later that day, White's attorney made several statements about the matter, including that:

the SEC had no evidence to support the connection between White and the person he allegedly tipped; and

“This case is an example of the great care the SEC takes to squash ants. They understood that they had no basis to sue this man for tipping, yet they insisted on going forward with this insipid claim."

Commissioner Aguilar argued at SEC Speaks that if post-settlement statements of the type Aguilar described continue, "it may be worth revisiting the Commission's practice of routinely accepting settlements from defendants who agree to sanctions 'without admitting or denying' the misconduct."

Topics