This enforcement action illustrates one of the most challenging problems that broker-dealers face in surveilling for manipulative trading: how is it possible to detect improper trading in an omnibus account for numerous undisclosed principals, when the broker-dealer has no definitive means to know which trades are for the same or related investors? It is a difficult problem, unless the foreign broker-dealer, through which the trades are submitted, is reasonably transparent and is fully…

The fact that this judicially-ordered settlement survived for over twenty years is a demonstration of how difficult the regulators and the courts find it to rescind any rule (or pseudo-rule in this case) once adopted. There is simply no justification for a judicial order to apply to a group of twelve firms twenty years after the relevant events.  

If the terms of the settlement were meaningful from a regulatory standpoint, they should have been applied to everyone. If the…

Commissioner Crenshaw describes the SEC's actions as favoring management over shareholders. Another way of describing the SEC's actions is that they favor shareholders over political actors.

It is not a victory for shareholders when political activists holding an immaterial number of shares in a company are able to force proxy votes on matters that are not economically material to the company. Such actions are not really intended to be a victory for the shareholders; they are intended…

Commissioner Crenshaw is correct to point out the limited grounds on which the Fifth Circuit remanded the rules. But saying that the grounds were limited is not the same as saying that the grounds were trivial. What the Court found is that the SEC had not cost-justified the rules. Commissioner Crenshaw seems to suggest that finding such cost-justification is a box-checking exercise that can be quickly accomplished.

That is not, or at least should not be, the case. Cost-justification…