The enforcement staff and the Commission review settlement offers based on the facts and circumstances of the case, including the severity of the alleged conduct, the sanctions imposed in similar, prior cases, policy considerations, litigation risk, and the likelihood of future violations. Generally, controls over negotiated settlements appeared adequate. All settlements are reviewed and approved by the Commission, which helps ensure consistency with policy. The Commission has established procedures for evaluating financial hardship claims by subjects. Subjects must submit sworn financial statements, which demonstrate an inability to pay disgorgements or penalties.
Full payment is required if the subjects' financial statements prove to be false.
As discussed below, we are recommending several enhancements to settlement procedures. After a settlement is approved, the lead attorney for the case monitors payments of disgorgements and penalties under it. However, enforcement attorneys generally are not trained in collection procedures, and their major focus is on their current caseload. The Division of Enforcement should outsource appropriate collection work to DOJ if it receives authorization. Consideration of Settlement Issues Several staff we interviewed indicated that earlier consideration of settlement issues by the Commission would be helpful and save time.