{"id":480,"date":"2009-03-07T09:07:49","date_gmt":"2009-03-07T09:07:49","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2009\/03\/sec_actions_are_biased_toward"},"modified":"2021-09-20T15:41:47","modified_gmt":"2021-09-20T20:41:47","slug":"sec-actions-are-biased-toward","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/sec-actions-are-biased-toward\/","title":{"rendered":"Outcome of SEC Actions Appear to Favor Larger Broker-Dealers than Smaller Ones, Says Harvard Law School Study"},"content":{"rendered":"<p>\t\t\t\tThe Securities and Exchange Commission may be &#8220;too close&#8221; to larger investment firms that they give them preferential treatment in SEC Actions, says a Harvard Law School study. One &#8220;tentative&#8221; explanation cited by the study is that SEC officials look to the larger broker-dealers-especially those located in New York-for future employment opportunities. The study also noted that the SEC was more likely to order smaller broker-dealers (than larger firms) to court, rather than merely slapping the firm with an administrative proceedings.<\/p>\n<p>The Harvard study took a look at patterns the SEC exhibited when it enforced actions against investment firms in 1998, 2005, 2006, and Jan \u2013 April in 2007. Findings included:<\/p>\n<p>\u2022\tWhen large investment firms and smaller firms faced the same <a href=\"https:\/\/www.investorlawyers.com\/broker-misconduct.html\">SEC violations <\/a>for similar levels of harm, there was a 75% smaller chance that a big broker-dealer would have to go to court than one of its smaller counterparts.<br \/>\n\u2022\tThere was a 44% chance that employees from large broker-dealers would have to go to court to fight an SEC action, compared to a 73% possibility for employees of smaller broker-dealers.<br \/>\n\u2022\tWhen facing SEC administrative proceedings, bigger firms were less likely to be banned from the industry. 25% of small firms defendants in such actions received permanent industry bans, compared to just 5% of large firm defendants.<br \/>\n\u2022\tThere did not appear to be a justifiable reason for why there was a disparity between the outcomes of SEC actions involving larger broker-dealers and smaller ones.<br \/>\n\u2022\tHowever, both large and small firms were slapped with equivalent fines.<\/p>\n<p>The study did not look at SEC enforcement actions in 1999 and 1920 because of worries the findings might be affected by the burst of the &#8220;dot.com bubble,&#8221; as well as the outcomes of SEC actions from 2008 that may have been impacted by the financial crisis. <\/p>\n<p><strong>Related Web Resources:<\/strong><br \/>\n<a href=\"https:\/\/www.sec.gov\/\">Securities and Exchange Commission<\/a><br \/>\n<a href=\"https:\/\/www.sec.gov\/divisions\/enforce\/enforceactions.shtml\">SEC Enforcement Actions<\/a><br \/>\n <a href=\"https:\/\/www.investorlawyers.com\/blog\/sec-actions-are-biased-toward\/#more-480\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Securities and Exchange Commission may be &#8220;too close&#8221; to larger investment firms that they give them preferential treatment in SEC Actions, says a Harvard Law School study. One &#8220;tentative&#8221; explanation cited by the study is that SEC officials look to the larger broker-dealers-especially those located in New York-for future employment opportunities. The study also [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3774,3740,3760],"tags":[],"class_list":["post-480","post","type-post","status-publish","format-standard","hentry","category-broker-dealers","category-miscellaneous","category-sec-enforcement"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Outcome of SEC Actions Appear to Favor Larger Broker-Dealers than Smaller Ones, Says Harvard Law School Study &#8212; Investor Lawyers Blog &#8212; March 7, 2009<\/title>\n<meta name=\"description\" content=\"The Securities and Exchange Commission may be &quot;too close&quot; to larger investment firms that they give them preferential treatment in SEC Actions, says a &#8212; March 7, 2009\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/sec-actions-are-biased-toward\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Outcome of SEC Actions Appear to Favor Larger Broker-Dealers than Smaller Ones, Says Harvard Law School Study &#8212; 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