Bifurcated Settlements: A New Approach To O&D Bars

Law360, New York (September 4, 2008, 12:00 AM EDT) -- A new strategy has emerged for defendants facing the threat of an officer and director bar (“O&D bar”) in an enforcement action by the Securities and Exchange Commission: enter into a bifurcated settlement that allows a judge to decide whether an O&D bar should be imposed.

To avoid an O&D bar, a defendant has traditionally faced a difficult choice: defeat the SEC on the merits or convince the SEC to abandon pursuit of the bar because evidence has changed. Both options present high burdens for defendants...
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