For the second year in a row, Manatt's John Libby, co-chair of the firm's Corporate Investigations and White Collar Defense practice, participated in California Lawyer's annual White-Collar Defense roundtable. Published in the magazine's February 2015 issue, the discussion focused on the latest developments in white-collar criminal law include a gamechanging decision on insider trading, new sentencing guidelines for fraud convictions, more options for filing charges under the bank fraud statutes, and a big heads-up from the Department of Justice on healthcare billing.
When asked what would be the ramifications if the SEC avoids the courts and uses more administrative proceedings, Libby responded:
"This has been a hot issue since Dodd-Frank in 2010 expanded the SEC's ability to use administrative proceedings against all persons, not just those practicing before it or subject to their jurisdiction. A case was just filed in early January in federal court in the Eastern District of Wisconsin, Bebo v. SEC, challenging the SEC's use of administrative proceedings as being an unconstitutional violation of due process.
"You have a situation where the SEC now can bring a proceeding where they have the full range of penalties available in district court, but they don't have to provide discovery to the defendant, they don't have to follow the rules of evidence, the case is heard by an SEC-paid administrative law judge, and there's no right to jury trial. And the cases are typically set for hearing on an expedited basis. It's going to be interesting to see how the Bebo case plays out and how criticism from the defense bar affects the SEC's filing decisions and use of this new power."