SEC Attorneys Are Told to Consult With Bosses

Securities and Exchange Commission enforcement lawyers shouldn’t reject companies’ offers to pay large settlements without first notifying the commissioners, SEC member Paul Atkins said.

Atkins said the agency’s enforcement unit had “enormous power” and sometimes negotiated settlements without informing the five commissioners, who have the authority to sign off on the accords.

In one case last month, SEC staff attorneys turned down a $100-million offer from Time Warner Inc., demanding more before agreeing to seek approval of a $300-million penalty that was opposed by Atkins.

“Commissioners, who are the only public officials at the agency, should be making the determination of whether a $500-million penalty is more appropriate than a $500,000 penalty in a particular case,” Atkins said Monday in a speech at Howard University School of Law in Washington.