SEC Announces “Refined and Expanded” Policy Prohibiting Defendants in Follow-On Agency Proceedings From Contesting Facts Underlying Consent Injunctions, Despite Settlement Language to the Contrary

August 01, 2003

In a recent opinion, the Securities and Exchange Commission (“SEC” or “Commission”) announced a “refined and expanded” policy for administrative disciplinary proceedings based on consent injunctions, and, in particular, consent injunctions involving fraud. The new policy will apply prospectively to consent injunctions that are “both agreed to and entered by a court” after the Melton decision. The new policy has serious implications for defendants considering settlement with the agency.

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