Division of Enforcement Issues Guidance on Its Approach to Forum Selection

By Matthew Garza, J.D.

“There is no rigid formula dictating the choice of forum,” the SEC wrote in guidance released late Friday afternoon on the issue of forum selection in contested actions. The four page document set out a list of four “potentially relevant considerations” the Division of Enforcement uses in deciding whether to bring an action before an Administrative Law Judge or in federal court:

1. The availability of the desired claims, legal theories, and forms of relief in each;
2. whether any charged party is a registered entity or an individual associated with a registered entity;
3. the cost‐, resource‐, and time‐effectiveness of litigation in each forum;
4. fair, consistent, and effective resolution of securities law issues and matters.

The guidance specifies that the list is not, “and could not be,” exhaustive.