Fort Lauderdale, FL SEC defense attorney David R. Chase talks about the factors that influence SEC charging decisions. He outlines the many factors the SEC considers when deciding whether to bring charges against an individual or entity. He notes that the agency evaluates the quality and nature of the evidence, including how persuasive and credible it is, as well as whether the alleged conduct caused actual harm to investors rather than merely constituting a technical violation that resulted in no economic loss. He also points out that the SEC considers the background of the investigation’s target, including whether the individual has previously violated federal securities laws or has been subject to a criminal prosecution, noting that a recidivist with a prior record may face a significantly greater risk of prosecution.

He further explains that the SEC considers whether the individual or company has taken steps to remediate the violation or mitigate the resulting harm. These efforts may include implementing new policies and procedures, terminating individuals responsible for the underlying violations, and taking other corrective measures. He notes that the SEC has historically considered such remediation efforts and continues to do so under the current administration when determining whether to bring charges and, if charges are pursued, when discussing appropriate settlement terms.

He also emphasizes that the SEC’s enforcement priorities can change depending on the administration in place. He gives the example that conduct considered chargeable under a prior administration may not receive the same treatment under the current administration. He stresses that understanding the SEC’s current enforcement priorities is therefore important when assessing the likelihood that a particular violation, if proven, will ultimately be prosecuted.