SEC Fines Deemed Capricious By Appeals Court

Law360, New York (November 18, 2005, 12:00 AM EST) -- An appeals court has ruled that the Securities and Exchange Commission arbitrarily levied hundreds of thousands of dollars in penalties on three executives accused of carrying out a series of matched trades.

The U.S. District Court of Appeals for the D.C. Circuit said that the SEC had erred in fining two directors of business development company Rockies Fund Inc. $160,000 each and one director $500,000.

In the ruling, the court said that the penalties represented the harshest level of sanctions available, but that the SEC hadn’t...
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