Policy Statement Concerning Agency Referrals for Potential Criminal Enforcement, 26203-26204 [2025-11332]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 90, Number 117 (Friday, June 20, 2025)]
[Rules and Regulations]
[Pages 26203-26204]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-11332]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 202

[Release 34-103277]


Policy Statement Concerning Agency Referrals for Potential 
Criminal Enforcement

AGENCY: Securities and Exchange Commission.

ACTION: Final rule; policy statement.

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SUMMARY: Pursuant to Executive Order 14294, the Securities and Exchange 
Commission (``Commission'') is publishing this framework for staff 
consideration of whether to refer potential violations, including of 
criminal regulatory offenses, to the Department of Justice.

DATES: This final rule and policy statement is effective June 20, 2025.

FOR FURTHER INFORMATION CONTACT: Samuel Waldon, Acting Director, 
Division of Enforcement, at (202) 551-4500, Division of Enforcement, 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 
20549.

SUPPLEMENTARY INFORMATION: On May 9, 2025, the President issued 
Executive Order 14294 (``Executive Order''), titled Fighting 
Overcriminalization in Federal Regulations. 90 FR 20363 (published May 
14, 2025). Among other things, the Executive Order directs each agency 
to publish guidance in the Federal Register describing its plan to 
address criminally liable regulatory offenses, including by considering 
certain factors when deciding whether to refer alleged violations of 
criminal regulatory offenses to the Department of Justice. The 
Executive Order defines a criminal regulatory offense to mean ``a 
Federal regulation that is enforceable by a

[[Page 26204]]

criminal penalty.'' In accordance with the Executive Order, the 
Commission is publishing this framework for Commission staff 
consideration of whether to refer potential violations, including of 
criminal regulatory offenses, to the Department of Justice.

Administrative Law Matters

    The provisions of the Administrative Procedure Act (``APA''), 5 
U.S.C. 553, regarding notice of proposed rulemaking, opportunities for 
public comment, and prior publication are not applicable to general 
statements of policy, such as this policy statement. Similarly, the 
provisions of the Regulatory Flexibility Act, 5 U.S.C. 601-602, apply 
only when notice and comment are required by the APA or another statute 
and are therefore not applicable. For similar reasons, the provisions 
of the Small Business Regulatory Enforcement Fairness Act are not 
applicable. See 5 U.S.C. 804(3)(C) (the term ``rule'' does not include 
``any rule of agency organization, procedure, or practice that does not 
substantially affect the rights or obligations of non-agency 
parties''). This statement does not impose any collection of 
information requirements as defined by the Paperwork Reduction Act of 
1995. See 5 CFR 1320.3(c).

List of Subjects in 17 CFR Part 202

    Administrative practice and procedure.

Text of Amendment

    For the reasons set out in the preamble, the Commission is amending 
title 17, chapter II of the Code of Federal Regulations as follows:

PART 202--INFORMAL AND OTHER PROCEDURES

0
1. The general authority citation for part 202 is revised to read as 
follows:

    Authority: 15 U.S.C. 77s, 77t, 77sss, 77uuu, 78d-1, 78u, 78w, 
80a-37, 80a-41, 80b-9, 80b-11, and 7202, unless otherwise noted.
* * * * *


0
2. Add Sec.  202.14 to read as follows:


Sec.  202.14  Policy statement concerning agency referrals for 
potential criminal enforcement.

    (a) Subject to appropriate exceptions and to the extent consistent 
with law, in considering whether to refer potential violations, 
including of criminal regulatory offenses, to the Department of 
Justice, the staff of the Commission should consider, among other 
factors:
    (1) The harm or risk of harm, pecuniary or otherwise, caused by the 
potential offense, including whether the putative defendant's conduct 
harmed or risked harming many victims;
    (2) The potential gain to the putative defendant that could result 
from the offense;
    (3) Whether the putative defendant held specialized knowledge, 
expertise, or was licensed in an industry related to the rule or 
regulation at issue;
    (4) Whether the putative defendant knew the conduct would cause 
harm or that it violated the law;
    (5) Whether the putative defendant is a recidivist or has otherwise 
engaged in a pattern of misconduct; and
    (6) Whether the involvement of the Department of Justice will 
provide additional meaningful protection to investors.
    (b) This general policy is not intended to, and does not, create 
any right or benefit, substantive or procedural, enforceable at law or 
in equity by any party against the United States, its departments, 
agencies, or entities, its officers, employees, or agents, or any other 
person.

    By the Commission.
    Dated: June 16, 2025.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2025-11332 Filed 6-18-25; 8:45 am]
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