SEC Explains Rules for Suspending Professionals
Rule of Practice 102(e) allows the Securities and Exchange Commission to prohibit a professional service provider (think lawyer or accountant) from practicing before the SEC. What triggers the sanctions? From David Smyth of law firm Brooks Pierce:
“The scope of potential acts is fairly wide, but includes federal securities law violations, as well as ‘unethical or improper conduct.’ Even to be ‘lacking in character or integrity’ can be enough to be temporarily or permanently barred from practicing before the Commission.”
Case in point: the SEC suspended Michael Pattison, a CPA found guilty of backdating stock options, under the rule. Pattison protested that discipline for improper conduct, not suspension, was the appropriate sanction.
“The SEC disagreed, saying … [the] ‘Rule … reflects our determination that a finding by a court of competent jurisdiction that a respondent has violated securities laws … is a sufficient standard of unfitness for practice before the Commission…”
Read the update, SEC Lays Out Standards for 102(e) Proceedings - Brooks Pierce»
