Appendix 14 Sec Policy Statement Concerning Cooperation By Individuals In Its Investigations And Related Enforcement Actions

• Author: Robert W. Tarun
• Profession: Former Executive Assistant U.S. Attorney in Chicago
• Pages: 1011-1014

APPENDIX 14

SEC Policy Statement Concerning

Cooperation by Individuals in

Its Investigations and Related

Enforcement Actions

17 C.F.R. § 200.12 (2010)

Title 17: Commodity and Securities Exchanges

Part 202—Informal and Other Procedures

202.12 Policy statement concerning cooperation by individuals in its investiga-

tions 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 vio-

lations of the federal securities laws, increase the effectiveness and efficiency of

the Commission’s investigations, and provide important evidence for the Com-

mission’s enforcement actions. There is a wide spectrum of tools available to the

Commission and its staff for facilitating and rewarding cooperation by individ-

uals, 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 pre-

sented, 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 enforce-

ment actions (“Investigation”); the importance of the underlying matter in which

the individual cooperated; the societal interest in ensuring that the cooperating

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