SEC Imposes Dodd-Frank Remedies on Conduct Pre-Dating Enactment
The SEC has ruled that it can impose remedies provided by the Dodd-Frank Act to actions that occurred before passage of the statute. In a case against a hedge fund manager alleged to have engaged in various fraudulent activities, the SEC imposed a collateral bar (i.e. a ban from associating with a broker-dealer, municipal securities dealer, NSRSO, etc.) even though the law before the passage of Dodd-Frank would only permit a ban from associating with an investment adviser. The SEC ruled that the collateral bar did not amount to the retroactive application of a statute because the collateral bar, unlike the imposition of penalties or disgorgement, protected the public from future harm rather than punishing prior misconduct.