Although we are not adverse to criticizing the SEC in this blog, we believe Congress’ actions may be overkill. Certain congressmen are requesting data on the SEC activities relating to the Gabelli appeal.
In Gabelli, the Supreme Court unanimously concluded that a general five-year statute of limitations pertaining to government civil penalty actions begins when the fraud occurs, not when it is discovered. The Supreme Court found that the SEC was out of time in suing two investment adviser executives in 2008, over their roles in an alleged market timing scheme that occurred between 1999 to 2002. The lawmakers attacked the SEC for pursuing Gabelli while not finishing its “required” work relating to areas, including, among others, the JOBS Act. In any event, Congress has demanded time information for the SEC staff, who litigated the matter and the appeal, as well as monies paid to outside counsel. See http://op.bna.com/srlr.nsf/r?Open=ywik-966mms.
Essentially, these lawmakers are going after the SEC, despite the SEC’s initial victory in the case. Politics as usual.