Bill Overview
Title: Administrative Enforcement Fairness Act of 2022
Description: This bill allows an administrative proceeding brought under the Securities Exchange Act of 1934 to be removed to the appropriate federal district court.
Sponsors: Sen. Lummis, Cynthia M. [R-WY]
Target Audience
Population: people involved in securities and financial markets
Estimated Size: 3000000
- The bill affects administrative proceedings under the Securities Exchange Act of 1934, which regulates securities markets and requires disclosure of certain financial information by publicly traded companies.
- The main groups directly impacted are likely to be individuals involved in securities and financial markets, including investors, brokers, and financial advisors.
- Publicly traded companies could also be impacted since the proceedings and trials related to securities law might now be overseen by federal district courts instead of administrative courts.
- The general population might experience indirect effects, such as changes in stock market regulations or enforcement practices, although those effects are not the primary target of the bill.
Reasoning
- The policy directly impacts individuals who are involved in financial markets and securities, such as investors, brokers, corporate financial officers, and lawyers.
- Given the specificity of the policy, the pool of those primarily affected is relatively small in relation to the whole US population, but significant within the financial sector.
- Publicly traded companies, especially their administrative and legal teams, are likely to see changes in how they handle compliance and legal disputes.
- Indirect effects on the general population are probable through potential changes in market stability and regulatory environment, though these are not as direct as those experienced by professionals in the field.
- The budget limitations suggest a need to carefully measure the impact primarily on those directly involved in these new legal proceedings, rather than broader public initiatives.
Simulated Interviews
Stockbroker (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- The Act could provide more clarity and possibly speed up proceedings, but it might also lead to more costly court battles.
- It may benefit investors by ensuring actions are handled in federal courts, potentially reducing uncertainty.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 5 |
Corporate Lawyer (Los Angeles, CA)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- This shift could increase business as companies may require more legal representation at higher levels of courts.
- Federal courts may offer more robust protection, but also introduce the risk of more severe penalties.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 9 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 4 |
Financial Advisor (Chicago, IL)
Age: 35 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 6/20
Statement of Opinion:
- Clients might appreciate the transparency this policy could bring, but there’s concern about the transition period causing temporary market instability.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 6 | 4 |
| Year 20 | 6 | 4 |
Retired Investor (Houston, TX)
Age: 60 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- It's good for investors if the new system is more transparent, but the potential for increased legal challenges could be worrying.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Tech Startup Founder (San Francisco, CA)
Age: 28 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 7.0 years
Commonness: 3/20
Statement of Opinion:
- A change to federal courts might make things more predictable, but also introduces a larger administrative burden on small companies going public.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 6 |
Financial Regulator (Boston, MA)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- The shift may ease some administrative burdens but impose others on federal courts. Aligning processes could be challenging initially.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Independent Investor (Philadelphia, PA)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 4.0 years
Commonness: 8/20
Statement of Opinion:
- Greater judicial scrutiny might provide more fairness, which is a positive, but legal costs might rise, affecting small investors.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Compliance Officer (Miami, FL)
Age: 32 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 5/20
Statement of Opinion:
- Federal oversight could imply stricter compliance requirements, although it may ultimately lead to more consistent rulings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Legal Researcher (Seattle, WA)
Age: 30 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 6.0 years
Commonness: 2/20
Statement of Opinion:
- The Act may increase demand for legal research in federal court processes, posing both opportunities and challenges for adaptation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 5 |
Economics Professor (Atlanta, GA)
Age: 42 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 3/20
Statement of Opinion:
- This policy should ideally reduce ambiguities in securities law enforcement, but might lead to increased demand for academic expertise in court settings.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Cost Estimates
Year 1: $15000000 (Low: $10000000, High: $20000000)
Year 2: $12000000 (Low: $8000000, High: $16000000)
Year 3: $10000000 (Low: $7000000, High: $13000000)
Year 5: $8000000 (Low: $5000000, High: $10000000)
Year 10: $5000000 (Low: $3000000, High: $7000000)
Year 100: $2000000 (Low: $1000000, High: $3000000)
Key Considerations
- No direct impact on federal taxation is expected.
- Court costs might be higher than for administrative proceedings, impacting federal court budgets.
- The policy could streamline enforcement proceedings, possibly leading to slight savings over time.