In courts across the country, the Securities and Exchange Commission has argued and filed hundreds of pages of briefs in defense of the constitutionality of its in-house proceedings.
Against the backdrop of that litigation, the commission approved changes to its administrative proceedings Wednesday without a peep — holding no discussion on rules that will give individuals and companies more time to prepare for hearings and depositions in certain matters.
The SEC proposed the new rules in September. SEC Chairwoman Mary Jo White characterized the package of changes then as an effort to “modernize our rules of practice for administrative proceedings, including provisions for additional time and prescribed discovery for the parties.”
In September, the SEC proposed giving defendants up to eight months to prepare for hearings before the agency’s in-house judges, a change that would have doubled the current prehearing period of four months. But in an apparent response to commenters who pressed for more time, the final rules approved Wednesday give up to 10 months of preparation.
“It’s certainly not everything that the defense wanted, but I think it will be viewed as a step in the right direction,” said Joel Green, a partner in the Washington office of Wilmer Cutler Pickering Hale and Dorr. “The concern from the defense bar throughout this dialogue has been that the SEC was or could be perceived as pursuing a home court advantage. This reflects a recognition of the concern.”
Green noted that it remains to be seen how much preparation time the administrative law judges will provide within the new maximum prehearing period of 10 months.
“It’s a maximum of 10 months, but really, in practice, if you’re getting a shorter period than that, then it’s still putting tremendous pressure on the defense.”