A Grounded Theory Analysis of Cases Pursued by the Securities and Exchange Commission



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In the midst of the Great Depression in the 1930s, the government took considerable actions in an attempt to control the questionable and troubling practices of business to help prevent a similar crisis from ever burdening the nation again. What it created was the Securities and Exchange Commission (“SEC”), which today continues to bear primary responsibility for the administration of securities laws and enforcement actions against violators. Moreover, the SEC has increasingly gained enforcement capacities over its lifespan. Today, it can not only impose professional bars on violators, but also force them to forfeit any ill-gotten gains and even pay monetary fines through civil and administrative proceedings. While not conventionally thought of as criminal, these white-collar offenses can have a tremendous and harmful impact on their victims and the larger market. This research used a grounded theory approach to explore themes across the way the SEC handles the violators it detects and pursues in these proceedings, while also examining a small number of cases that were dealt with in the criminal courts. Publicly available litigation releases available through the agency’s website were used. Overall, the SEC was observed to operate in a generally predictable and equitable manner in which most of those who are charged are ultimately sanctioned in some way. Particularly interesting interactions were observed between entities and sanctioning outcomes. A secondary objective was to compare the handling of cases by the SEC under the administrations of two presidents from different parties, George W. Bush, a Republican, and Barrack Obama, a Democrat. The two periods exhibited a good deal of similarity, but also unexpectedly showed that more severe monetary penalties were imposed during the Bush administration. The thesis concludes with a discussion of limitations and policy implications.



White-collar crime, SEC, Litigation releases, Administrative proceedings