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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)

Restitution Order Set Aside After Court Remand

Michael Frederick Siegel, Exchange Act Rel. 62324, June 18, 2010

In 2008 the Commission upheld a NASD action that found Siegel violated various NASD rules (selling away and unsuitable recommendations) and among other things upheld sanctions (two six month suspensions) and an order that he pay restitution to customers totaling $400,000. On appeal the D.C. Court of Appeals vacated the restitution order, but upheld the findings of violations and the other relief. It remanded the matter to the Commission to deal with the restitution issue. Michael Frederick Siegel v SEC, 592 F.3d 147, 150, 158 (D.C. Cir. 2010).

Without any meaningful explanation the Commission set aside the restitution order. Here is what the Commission said – "Given the remedial sanctions sustained against Siegel and the age of the case, we have decided, in our discretion, to set aside the order of restitution imposed against him. We do not at this time express a view on the merits. In the future, we ask that the NASD articulate the causation standard required ... when it orders restitution."

If the Commission was correct in its original ruling, it should defend it. If it was wrong, it should admit it. And of course, ordering the NASD to articulate its sanctions is something of a lost cause as it no longer exists. This kind of evasion just isn't appropriate for a public agency.