Discussion—Federal Agency Adjudication
Find a news article that describes an administrative agency that is exercising its power to either adjudicate or investigate and include a link to the article in your discussion group post.
In your initial post:
• Describe the agency adjudicatory or investigatory power discussed in the article.
• Give specific reasons why you believe that the agency is engaged in adjudication or investigation as opposed to rulemaking.
• Use the readings from this module (and any relevant outside research) to describe one thing that the agency would be prohibited from doing in the course of its investigation or adjudication; identify the legal authority for your belief that the agency would be prohibited from doing that particular thing.
Give reasons in support of your responses. Be sure to cite any relevant resources.
Write your initial response in 300 to 400 words. Apply Bluebook standards to citation of sources.
Federal Agency Adjudication
According to Ferris(2018), the Securities and Exchange Commission has been exercising their power to investigating Model 3 production targets(link: https://www.cnbc.com/2018/11/02/tesla-says-doj-and-sec-are-investigating-model-3-production-targets.html). The SEC has the powers and the rights to investigate any publicly traded company for potential frauds and illegalities. Through SEC directives, FBI agents were investigating whether Tesla Company had misled the investors on their potential production for Model 3 sedans. Recently, the SEC was investigating Mr. Musk over his statements to take Tesla private, but they reached a settlement.
The SEC was involved in investigations as opposed to rule-making because it was formed for the main purpose of conducting investigation into activities of public companies. The SEC is keen to conduct comprehensive investigations that will gather information to guide and adjudicate on future actions. The investigations could be conducted on a private setting to avoid harming the reputation of the companies involved (Defond, Jere & Nicholas 2018). In contrast, rule-making requires for the agency to hire more legal and constitutional expertise to help in the creation of the regulations. The SEC was formed with the sole responsibility of implementing the SOX Act that ensures that all public and private companies are transparent and accountable the investors and all stakeholders (Lowenfels & Michael, 2015). Therefore, the SEC invests its resources in oversight of the companies to ensure they adhere to all public financial reporting standards and guidelines rather than the rule-making.
During their investigation process, the SEC cannot bring civil lawsuit action against a matter that occurred 5 years ago. The SEC is limited to seeking civil penalties when the alleged fraud took place 5 years ago before it was identified. The legal authority of 28 U.S.C § 2462 prevents the SEC from bringing a civil legal action for past alleged crimes. As a result, it is recommendable for the SEC that the investigation is focused on current alleged fraud schemes rather than past allegations older than five years.
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28 U.S.C § 2462(1948)
Lewis D. Lowenfels & Sullivan J. Michael, “SEC policy change re settlements with admissions of wrongdoing,” 68 SMUL Rev. 795 (2015).
Mark L. Defond, Francis R. Jere & Hallman J. Nicholas, ” Awareness of SEC Enforcement and Auditor Reporting Decisions,” 35 Contemporary Accounting Research 278(2018).
Robert Ferris, “Tesla Says Justice Department and SEC Are Investigating Model 3 Production Targets,” CNBC., www.cnbc.com/2018/11/02/tesla-says-doj-and-sec-are-investigating-model-3-production-targets.html.
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