SEC Permits Requests To Vacate Collateral Bars Based On Pre-Dodd-Frank Conduct

The SEC announced an expedited program allowing eligible individuals to request that the SEC vacate collateral bars ("i.e. bars from industries with which the individual was not associated or not seeking to associate at the time of his or her securities law violation") imposed against them. The SEC expedited program was a response to the D.C. Circuit's January 17, 2017 decision Bartko v. SEC, which held that collateral bars may not be imposed retroactively based on conduct predating the Dodd-Frank Act.

The SEC noted that the program applies only to collateral bars based solely on conduct prior to July 22, 2010, the effective date of the Dodd-Frank Act. The SEC cautioned that if an applicant attempts to associate in a new capacity in the securities industry in the future, the SEC "may bring a separate follow-on proceeding to determine whether to impose any remedial sanctions under existing law."