SEC Administrative Proceeding

SEC Administrative Proceeding
U.S. Securities Exchange Commission

What is an SEC Administrative Proceeding?

We publish news released by the Securities and Exchange Commission frequently announcing “Administrative Proceedings” against individuals or companies.  But, what is an Administrative Proceeding?

Retracted from the Securities and Exchange Commission website at www.sec.gov, they describe an Administrative Proceeding as:

The Commission can seek a variety of sanctions through the administrative proceeding process.  Administrative proceedings differ from civil court actions in that they are heard by an administrative law judge (ALJ), who is independent of the Commission.  The administrative law judge presides over a hearing and considers the evidence presented by the Division staff and any evidence submitted by the subject of the proceeding.  Following the hearing, the ALJ issues an initial decision that includes findings of fact and legal conclusions.  The initial decision also contains a recommended sanction.  Both the Division staff and the defendant may appeal all or any portion of the initial decision to the Commission.  The Commission may affirm the decision of the ALJ, reverse the decision, or remand it for additional hearings.  Administrative sanctions include cease and desist orders, suspension or revocation of broker-dealer and investment advisor registrations, censures, bars from association with the securities industry, civil monetary penalties, and disgorgement.

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