LexisNexis Corporate & Securities Law Community 2011 Top 50 Blogs

Bon mots

"You can observe a lot just by watching." Yogi Berra

"We do not distain to borrow wit or wisdom from any man who is capable of lending us either." Henry Fielding, Tom Jones

"In our complex society the accountant's certificate and the lawyer's opinion can be instruments for inflicting pecuniary loss more potent than the chisel or the crowbar." United States v. Benjamin, 328 F.2d 854, 862 (2d Cir. 1964)

David Disraeli and Lifeplan Associates, Inc., Exchange Act Rel. 56045, July 11, 2007

Order denying motion to take SEC staff depositions

The Commission denied respondent's motion requesting that the Commission order the depositions of two staff members.  The Commission's Rules of Practice are very restrictive and permit depositions only under specific limited circumstances.  Rule 233 permits depositions only when the witness will be unable to attend the hearing due to age, sickness, infirmity, imprisonment, or absence from the U.S.  Depositions are also permitted in the "interests of justice." 

Depositions in SEC proceedings are not intended as a discovery mechanism.  The hearing had already been concluded.  Under Rule 452, leave to adduce additional evidence after the hearing closes is permitted under very limited circumstances.  Here, respondents failed to explain their failure to subpoena the staff members in question to testify at the hearing itself.  Further, respondents claimed that their purpose in seeking the testimony of an enforcement attorney was to show that the staff's investigation was not objective.  The Commission dismissed this argument noting that the ALJ's initial decision was based on the evidence submitted during the hearing, not the underlying investigation.  Their request to depose a staff accountant was denied because she testified at the hearing and was available for cross examination. 


Please note that the Commission seems to regularly post decisions to its web site a long time after those decisions are actually rendered.  They are posted in chronological order by date of decision, not date of posting.   This, and several other decisions have only recently been posted.  Thus, one must go back through the posted decisions on a regular basis to determine if old decisions have only recently been posted.  That is the reason you see July decisions with October posting dates.