Media Contact: Alexei Woltornist (202)225-6205

WASHINGTON, DC - On Tuesday, Rep. Warren Davidson (R-OH) introduced the Due Process Restoration Act of 2017 (H.R. 2128). The bill would provide defendants in SEC enforcement cases with the option to advance proceedings in a federal district court instead of internal SEC administrative courts. 

At a hearing of the House Financial Services Committee, Rep. Davidson questioned financial services experts on the need for the kind of SEC reforms contained in H.R. 2128. Experts offered the following comments in support of restoring due process rights for SEC defendants:

Ms. Hester Peirce, Senior Research Fellow, Mercatus Center: 

“The SEC can run its system well. They will run it better if people have the option of going to court.”

“[PHH and MetLife] are the two companies that were able to fight because they had the resources and courage to do so. Often, it is not worth the regulatory risk to take the fight to court, so you just suffer the consequences.”

Mr. John Allison, Former President, Cato Institute and Former CEO, BB&T: 

“Any [SEC] regulated company, particularly now, does not have practical access to the court system. By the time courts decide, you are already out of business… Under the doctrine the court has, they think the regulator is right. It is like being presumed guilty and you have to prove you are innocent.”

You can watch the video of the questioning here: https://youtu.be/jGXAzxJP50w