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19 January 2010. Two notices.


[Federal Register: January 19, 2010 (Volume 75, Number 11)]
[Rules and Regulations]               
[Page 3121-3122]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19ja10-9]                         


[[Page 3121]]

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Part V

Securities and Exchange Commission

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17 CFR Parts 200 and 202

Delegations of Authority to the Director of Its Division of Enforcement 
and Policy Statement Concerning Cooperation by Individuals in Its 
Investigations and Related Enforcement Actions; Final Rules


[[Page 3122]]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 200

[Release No. 34-61339]

 
Delegations of Authority to the Director of Its Division of 
Enforcement

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
amending its rules to delegate authority to the Director of the 
Division of Enforcement (``Division'') to submit witness immunity order 
requests to the Department of Justice for witnesses who have provided 
or have the potential to provide substantial assistance in the 
Commission's investigations and related enforcement actions. This 
delegation is intended to conserve Commission resources, enhance the 
Division's ability to detect violations of the federal securities laws, 
increase the effectiveness and efficiency of the Division's 
investigations, and improve the success of the Commission's enforcement 
actions.

DATES: Effective Date: January 19, 2010.

FOR FURTHER INFORMATION CONTACT: Joan McKown, Chief Counsel, (202) 551-
4933; or Jordan A. Thomas, Assistant Chief Litigation Counsel, (202) 
551-4475.

SUPPLEMENTARY INFORMATION: The Commission today is amending its rules 
governing delegations of authority to the Director of the Division of 
Enforcement. The amendment to Rule 30-4 (17 CFR 200.30-4) authorizes 
the Director of the Division of Enforcement (``Director'') to submit 
witness immunity order requests to the Department of Justice for 
witnesses who have provided or have the potential to provide 
substantial assistance in the Commission's investigations and related 
enforcement actions. This delegation is intended to conserve Commission 
resources, enhance the Division's ability to detect violations of the 
federal securities laws, increase the effectiveness and efficiency of 
the Division's investigations, and improve the success of the 
Commission's enforcement actions.
    Nevertheless, the Division may submit matters to the Commission for 
consideration, as it deems appropriate.
    The Commission finds, in accordance with the Administrative 
Procedure Act (``APA'') (5 U.S.C. 553(b)(3)(A)), that this revision 
relates solely to agency organization, procedures, or practices. It is 
therefore not subject to the provisions of the APA requiring notice and 
opportunity for comment. Accordingly, it is effective January 19, 2010.

List of Subjects in 17 CFR Part 200

    Administrative practice and procedure, Authority delegations 
(Government agencies).

Text of Amendment

0
For the reasons set out in the preamble, Title 17, Chapter II of the 
Code of Federal Regulations is amended as follows:

PART 200--ORGANIZATION; CONDUCT AND ETHICS; AND INFORMATION AND 
REQUESTS

0
1. The authority citation for Part 200, Subpart A, continues to read in 
part as follows:

    Authority:  15 U.S.C. 77o, 77s, 77sss, 77d, 78d-1, 78d-2, 78w, 
78ll(d), 78mm, 80a-37, 80b-11, and 7202, unless otherwise noted.
* * * * *

0
2. Section 200.30-4 is amended by adding paragraph (a)(14) to read as 
follows:


Sec.  200.30-4  Delegation of authority to Director of Division of 
Enforcement.

* * * * *
    (a) * * *
    (14) To submit witness immunity requests to the U.S. Attorney 
General for approval to seek an order compelling an individual to give 
testimony or provide other information pursuant to a subpoena that may 
be necessary to the public interest in connection with investigations 
and related enforcement actions pursuant to section 22(b) of the 
Securities Act of 1933 (15 U.S.C. 77v(b)), section 21(c) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u(c)), section 42(c) of 
the Investment Company Act of 1940 (15 U.S.C. 80a-41(c)) and section 
209(c) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-9(c)).
* * * * *

    By the Commission.

    Dated: January 13, 2010.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-842 Filed 1-15-10; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: January 19, 2010 (Volume 75, Number 11)] [Rules and Regulations] [Page 3122-3124] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr19ja10-10] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 202 [Release No. 34-61340] Policy Statement Concerning Cooperation by Individuals in Its Investigations and Related Enforcement Actions AGENCY: Securities and Exchange Commission. ACTION: Policy statement. ----------------------------------------------------------------------- SUMMARY: The Securities and Exchange Commission is issuing a policy statement announcing the analytical framework it uses to evaluate cooperation by individuals. DATES: Effective Date: January 19, 2010. FOR FURTHER INFORMATION CONTACT: Joan McKown, Chief Counsel, (202) 551- 4933; or Jordan A. Thomas, Assistant Chief Litigation Counsel, (202) 551-4475. SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission is issuing a policy statement announcing the analytical framework it uses to evaluate cooperation by individuals. This framework serves two important purposes: it promotes the fair and effective exercise of discretion by the Commission, and it enhances confidence on the part of the public and cooperating individuals that decisions regarding cooperation in the Commission's investigations and related enforcement actions will be made in an appropriate and consistent manner. The provisions of the Administrative Procedure Act (``APA''), 5 U.S.C. 553, regarding notice of proposed rulemaking, opportunities for public comment, and prior publication are not applicable to general statements of policy, such as this policy statement. Similarly, the provisions of the Regulatory Flexibility Act, 5 U.S.C. 601-602, apply only when notice and comment are required by the APA or another statute and are therefore not applicable. List of Subjects in 17 CFR Part 202 Administrative practice and procedure. Text of Amendment 0 For the reasons set out in the preamble, Title 17, Chapter II of the Code of Federal Regulations is amended as follows: [[Page 3123]] PART 202--INFORMAL AND OTHER PROCEDURES 1. The authority citation for Part 202 continues to read, in part, as follows: Authority: 15 U.S.C. 77s, 77t, 77sss, 77uuu, 78d-1, 78u, 78w, 78ll(d), 80a-37, 80a-41, 80b-9, 80b-11, 7202 and 7211 et seq., unless otherwise noted. * * * * * 0 2. Add Sec. 202.12 to read as follows: Sec. 202.12 Policy statement concerning cooperation by individuals in its investigations and related enforcement actions. Cooperation by individuals and entities in the Commission's investigations and related enforcement actions can contribute significantly to the success of the agency's mission. Cooperation can enhance the Commission's ability to detect violations of the federal securities laws, increase the effectiveness and efficiency of the Commission's investigations, and provide important evidence for the Commission's enforcement actions. There is a wide spectrum of tools available to the Commission and its staff for facilitating and rewarding cooperation by individuals, ranging from taking no enforcement action to pursuing reduced charges and sanctions in connection with enforcement actions. As with any cooperation program, there exists some tension between the objectives of holding individuals fully accountable for their misconduct and providing incentives for individuals to cooperate with law enforcement authorities. This policy statement sets forth the analytical framework employed by the Commission and its staff for resolving this tension in a manner that ensures that potential cooperation arrangements maximize the Commission's law enforcement interests. Although the evaluation of cooperation requires a case-by-case analysis of the specific circumstances presented, as described in greater detail below, the Commission's general approach is to determine whether, how much, and in what manner to credit cooperation by individuals by evaluating four considerations: the assistance provided by the cooperating individual in the Commission's investigation or related enforcement actions (``Investigation''); the importance of the underlying matter in which the individual cooperated; the societal interest in ensuring that the cooperating individual is held accountable for his or her misconduct; and the appropriateness of cooperation credit based upon the profile of the cooperating individual. In the end, the goal of the Commission's analysis is to protect the investing public by determining whether the public interest in facilitating and rewarding an individual's cooperation in order to advance the Commission's law enforcement interests justifies the credit awarded to the individual for his or her cooperation. (a) Assistance provided by the individual. The Commission assesses the assistance provided by the cooperating individual in the Investigation by considering, among other things: (1) The value of the individual's cooperation to the Investigation including, but not limited to: (i) Whether the individual's cooperation resulted in substantial assistance to the Investigation; (ii) The timeliness of the individual's cooperation, including whether the individual was first to report the misconduct to the Commission or to offer his or her cooperation in the Investigation, and whether the cooperation was provided before he or she had any knowledge of a pending investigation or related action; (iii) Whether the Investigation was initiated based on information or other cooperation provided by the individual; (iv) The quality of cooperation provided by the individual, including whether the cooperation was truthful, complete, and reliable; and (v) The time and resources conserved as a result of the individual's cooperation in the Investigation. (2) The nature of the individual's cooperation in the Investigation including, but not limited to: (i) Whether the individual's cooperation was voluntary or required by the terms of an agreement with another law enforcement or regulatory organization; (ii) The types of assistance the individual provided to the Commission; (iii) Whether the individual provided non-privileged information, which information was not requested by the staff or otherwise might not have been discovered; (iv) Whether the individual encouraged or authorized others to assist the staff who might not have otherwise participated in the Investigation; and (v) Any unique circumstances in which the individual provided the cooperation. (b) Importance of the underlying matter. The Commission assesses the importance of the Investigation in which the individual cooperated by considering, among other things: (1) The character of the Investigation including, but not limited to: (i) Whether the subject matter of the Investigation is a Commission priority; (ii) The type of securities violations; (iii) The age and duration of the misconduct; (iv) The number of violations; and (v) The isolated or repetitive nature of the violations. (2) The dangers to investors or others presented by the underlying violations involved in the Investigation including, but not limited to: (i) The amount of harm or potential harm caused by the underlying violations; (ii) The type of harm resulting from or threatened by the underlying violations; and (iii) The number of individuals or entities harmed.\1\ --------------------------------------------------------------------------- \1\ Cooperation in Investigations that involve priority matters or serious, ongoing, or widespread violations will be viewed most favorably. --------------------------------------------------------------------------- (c) Interest in holding the individual accountable. The Commission assesses the societal interest in holding the cooperating individual fully accountable for his or her misconduct by considering, among other things: (1) The severity of the individual's misconduct assessed by the nature of the violations and in the context of the individual's knowledge, education, training, experience, and position of responsibility at the time the violations occurred; (2) The culpability of the individual, including, but not limited to, whether the individual acted with scienter, both generally and in relation to others who participated in the misconduct; (3) The degree to which the individual tolerated illegal activity including, but not limited to, whether he or she took steps to prevent the violations from occurring or continuing, such as notifying the Commission or other appropriate law enforcement agency of the misconduct or, in the case of a violation involving a business organization, by notifying members of management not involved in the misconduct, the board of directors or the equivalent body not involved in the misconduct, or the auditors of such business organization of the misconduct; (4) The efforts undertaken by the individual to remediate the harm caused by the violations including, but not limited to, whether he or she paid or agreed to pay disgorgement to injured investors and other victims or assisted these victims and the authorities in the recovery of the fruits and instrumentalities of the violations; and [[Page 3124]] (5) The sanctions imposed on the individual by other federal or state authorities and industry organizations for the violations involved in the Investigation. (d) Profile of the individual. The Commission assesses whether, how much, and in what manner it is in the public interest to award credit for cooperation, in part, based upon the cooperating individual's personal and professional profile by considering, among other things: (1) The individual's history of lawfulness, including complying with securities laws or regulations; (2) The degree to which the individual has demonstrated an acceptance of responsibility for his or her past misconduct; and (3) The degree to which the individual will have an opportunity to commit future violations of the federal securities laws in light of his or her occupation--including, but not limited to, whether he or she serves as: A licensed individual, such as an attorney or accountant; an associated person of a regulated entity, such as a broker or dealer; a fiduciary for other individuals or entities regarding financial matters; an officer or director of public companies; or a member of senior management--together with any existing or proposed safeguards based upon the individual's particular circumstances. Note to Sec. 202.12. Before the Commission evaluates an individual's cooperation, it analyzes the unique facts and circumstances of the case. The above principles are not listed in order of importance nor are they intended to be all-inclusive or to require a specific determination in any particular case. Furthermore, depending upon the facts and circumstances of each case, some of the principles may not be applicable or may deserve greater weight than others. Finally, neither this statement, nor the principles set forth herein creates or recognizes any legally enforceable rights for any person. Dated: January 13, 2010. By the Commission. Elizabeth M. Murphy, Secretary. [FR Doc. 2010-843 Filed 1-15-10; 8:45 am] BILLING CODE 8011-01-P