SEC Will Only Target Directors in Egregious Cases | Bloomberg BNA

Securities and Exchange Commission enforcement cases alleging violative behavior by corporate directors are rare and will only be initiated in clear cases of misconduct or when obvious signs of violative behavior are ignored, Lara Shalov Mehraban, associate director in the agency's New York Regional Office, said.

Mehraban attempted to allay concerns voiced by corporations and their lawyers about the SEC enforcement cases against corporate directors and other gatekeepers, such as compliance officers, who may try to fix compliance problems and find themselves entangled in an agency investigation.

“Enforcement isn't second guessing good-faith decisions by the board, but rather bringing cases where directors have either taken affirmative steps to participate in fraud or enabled fraudulent conduct by unreasonably turning a blind eye to obvious red flags,” Mehraban said Feb. 10 at a Practising Law Institute conference in New York.

via SEC Will Only Target Directors in Egregious Cases | Bloomberg BNA.

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