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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

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Commission Denies Interlocutory Appeal Based on Dodd-Frank Deadlines

Montford & Co., Inc., IA Act Rel. 3311, November 9, 2011

Montford Co. and its Ernest Montford were charged administratively with IA act violations. They allege that the charges were not brought within the 180 day time limit following their receipt of a Wells notice as required by Dodd-Frank.

Section 4E of the Exchange Act requires that proceedings be brought within 180 days of a Wells notice unless the Division of Enforcement's Director extends the deadline and notifies the Chairman of his decision. The Division argued that it had complied with this requirement and provided emails and a declaration by its staff to demonstrate this. The ALJ denied respondent's motion to dismiss that was based on their claimed violation of Section 4E.

The Commission denied this interlocutory appeal. It noted that such appeals are disfavored and that the ALJ had refused to certify the issue for such an appeal. Under Commission rules such certification is required. It ruled that respondents' disagreement with the ALJ's ruling that Section 4E had not been violated was not a proper basis for an interlocutory appeal.

It noted "once the Commission exercises its prosecutorial discretion to institute a proceeding, 'the appropriate remedy for any challenge to that exercise of discretion is to litigate the proceeding to a final decision.'"