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People keep complaining about lack of jail time. As has been repeated in a number of subcomments: The SEC cannot send people to jail. Full stop. They have only

People keep complaining about lack of jail time. As has been repeated in a number of subcomments: The SEC cannot send people to jail. Full stop. They have only civil authority. They refer criminal cases to the US attorneys/DOJ, and offer assistance. All evidence suggests they did so here. The decision to criminally prosecute or not is out of their hands.

tabeth 9y ago
Why can't the SEC send people to jail? I don't understand the point you're making. If people believe something is an injustice should they just shut up? Even if they can't send people to jail people should complain if they feel that shouldn't be the case -- it's a signal that perhaps the current process is wrong. After all, all restrictions and rules were created by us to begin with. Complaining can be useful feedback.
- bllguo 9y ago
  they don't have the authority to do that... yes, people should inform themselves before talking. Jail time and other penalties will depend on the Justice Department
- Bud 9y ago
  Because it does not have the authority to do so. https://www.sec.gov/oiea/investor-alerts-bulletins/ib_investigations.html https://www.sec.gov/oiea/investor-alerts-bulletins/ib_invest...
  - tabeth 9y ago
    I've already read that -- it does not explain why. It simply states that it cannot. What law restricted it? Why was that law put into place? How often are recommendations for prosecution followed up on successfully? EDIT: Thanks everyone for the information -- very interesting.
    - Bud 9y ago
      I'm pretty sure no law restricted it, and that the SEC's powers were set when it was established in the 1930s during the New Deal. So the answer to "why" appears to be, "because that's how it was set up".
      - deleted 9y ago
        [deleted]
    - brandonmenc 9y ago
      There's probably not a law explicitly restricting it, because that's not a power it ever had in the first place.
    - Karunamon 9y ago
      Criminal litigation authority is on a whitelist, not a blacklist. It's not that a law restricted them, it's that they simply were never granted that authority. Random government authorities can't bring criminal proceedings anymore than the meter maid writing a parking ticket has the ability to haul you to court for parking in the wrong place. They send the information along to the people who do have that authority and act on it if they see fit (prosecutorial discretion). The key words in the article are "civil, not criminal".
      - tabeth 9y ago
        > The key words in the article are "civil, not criminal". My keyword is why.
        Karunamon 9y ago
        [disregard this, not enough caffiene today apparently] Separation of powers. The SEC is part of the executive branch. The judicial branch is responsible for bringing suit. If you want the why for that why, that's a philosophical discussion that probably won't be well served by a HN comment thread.
- gxs 9y ago
  There is a difference between complaining that the SEC should have the authority to send people to jail and complaining that the SEC can send people to jail but won't.
- cmurf 9y ago
  Regulatory agencies lack the authority. It's the same with the FAA. If you're a pilot and you fly drunk, the FAA will revoke your certification, but forward the case to the DoJ who have a U.S. attorney assigned to prosecute the case in federal court under federal law, not under FAA regulations. (Of course flying drunk tends to solve itself.)
- deleted 9y ago
  [deleted]
anigbrowl 9y ago
I don't see any mention of the matter being referred to the Department of Justice in the press release. I mean sure, DoJ surely watched what is coming out of the SEC and will decide separately, but (as we see here) the casual reader who is unfamiliar with agency structure will understandably conclude that the government is done with her.
- joering2 9y ago
  Absolutely DoJ will jump on it... they don't need other Dept blessings; now seeing Holmes taking deals, its a much easier case for prosecution. Give it 2 years max.
BinaryIdiot 9y ago
> All evidence suggests they did so here. What evidence? I have flipped through the SEC filing and some news articles and I don't see anything about it being referred to the DOJ.

tabeth 9y ago

Why can't the SEC send people to jail? I don't understand the point you're making. If people believe something is an injustice should they just shut up? Even if they can't send people to jail people should complain if they feel that shouldn't be the case -- it's a signal that perhaps the current process is wrong. After all, all restrictions and rules were created by us to begin with. Complaining can be useful feedback.

bllguo 9y ago
they don't have the authority to do that... yes, people should inform themselves before talking. Jail time and other penalties will depend on the Justice Department
Bud 9y ago
Because it does not have the authority to do so. https://www.sec.gov/oiea/investor-alerts-bulletins/ib_investigations.html https://www.sec.gov/oiea/investor-alerts-bulletins/ib_invest...
- tabeth 9y ago
  I've already read that -- it does not explain why. It simply states that it cannot. What law restricted it? Why was that law put into place? How often are recommendations for prosecution followed up on successfully? EDIT: Thanks everyone for the information -- very interesting.
  - Bud 9y ago
    I'm pretty sure no law restricted it, and that the SEC's powers were set when it was established in the 1930s during the New Deal. So the answer to "why" appears to be, "because that's how it was set up".
    - deleted 9y ago
      [deleted]
  - brandonmenc 9y ago
    There's probably not a law explicitly restricting it, because that's not a power it ever had in the first place.
  - Karunamon 9y ago
    Criminal litigation authority is on a whitelist, not a blacklist. It's not that a law restricted them, it's that they simply were never granted that authority. Random government authorities can't bring criminal proceedings anymore than the meter maid writing a parking ticket has the ability to haul you to court for parking in the wrong place. They send the information along to the people who do have that authority and act on it if they see fit (prosecutorial discretion). The key words in the article are "civil, not criminal".
    - tabeth 9y ago
      > The key words in the article are "civil, not criminal". My keyword is why.
      - Karunamon 9y ago
        [disregard this, not enough caffiene today apparently] Separation of powers. The SEC is part of the executive branch. The judicial branch is responsible for bringing suit. If you want the why for that why, that's a philosophical discussion that probably won't be well served by a HN comment thread.
gxs 9y ago
There is a difference between complaining that the SEC should have the authority to send people to jail and complaining that the SEC can send people to jail but won't.
cmurf 9y ago
Regulatory agencies lack the authority. It's the same with the FAA. If you're a pilot and you fly drunk, the FAA will revoke your certification, but forward the case to the DoJ who have a U.S. attorney assigned to prosecute the case in federal court under federal law, not under FAA regulations. (Of course flying drunk tends to solve itself.)
deleted 9y ago
[deleted]

anigbrowl 9y ago

I don't see any mention of the matter being referred to the Department of Justice in the press release. I mean sure, DoJ surely watched what is coming out of the SEC and will decide separately, but (as we see here) the casual reader who is unfamiliar with agency structure will understandably conclude that the government is done with her.

joering2 9y ago
Absolutely DoJ will jump on it... they don't need other Dept blessings; now seeing Holmes taking deals, its a much easier case for prosecution. Give it 2 years max.

BinaryIdiot 9y ago

> All evidence suggests they did so here. What evidence? I have flipped through the SEC filing and some news articles and I don't see anything about it being referred to the DOJ.