The Use of the Corporate Monitor in SEC Enforcement Actions

Brooklyn Journal of Corporate, Financial & Corporate Law, Vol. 1, p. 89, 2006

Villanova Law/Public Policy Research Paper No. 2008-02

47 Pages Posted: 1 Feb 2008

See all articles by Jennifer O'Hare

Jennifer O'Hare

Villanova University Charles Widger School of Law

Abstract

This paper addresses the SEC's recent use of the corporate monitor as ancillary relief in its enforcement actions. The corporate monitor represents the latest example of the SEC seeking to shift its enforcement responsibilities to the public companies it regulates. Focusing on the role played by the corporate monitor imposed by the SEC in its enforcement action brought against WorldCom, this paper considers some of the dangers posed by the use of the corporate monitor, such as the whether the appointment of a corporate monitor constitutes impermissible overreaching by the SEC. The paper recognizes that the corporate monitor can be an effective weapon against securities fraud, but cautions that, given the dangers inherent in its use, the SEC should seek a corporate monitor only in rare cases and publish guidance explaining when it will seek this remedy. Moreover, courts should develop clear standards limiting their judicial discretion to order this extraordinary ancillary remedy.

Keywords: corporate monitor, securities fraud, SEC enforcement, ancillary remedy, WorldCom

Suggested Citation

O'Hare, Jennifer, The Use of the Corporate Monitor in SEC Enforcement Actions. Brooklyn Journal of Corporate, Financial & Corporate Law, Vol. 1, p. 89, 2006, Villanova Law/Public Policy Research Paper No. 2008-02, Available at SSRN: https://ssrn.com/abstract=1088815

Jennifer O'Hare (Contact Author)

Villanova University Charles Widger School of Law ( email )

299 N. Spring Mill Road
Villanova, PA 19085
United States
610-519-7059 (Phone)
610-519-5672 (Fax)

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