• The First SEC Non-Prosecution Agreement:  Another Arrow in the Quiver
  • December 29, 2010 | Authors: Dixie L. Johnson; Carmen J. Lawrence
  • Law Firms: Fried, Frank, Harris, Shriver & Jacobson LLP - Washington Office ; Fried, Frank, Harris, Shriver & Jacobson LLP - New York Office
  • The SEC announced its first non-prosecution agreement last week, a four-page agreement with a children’s clothing marketer, Carter’s Inc., on December 17, 2010. This first glimpse at one of the SEC’s new cooperation tools appears to be a departure from the prior so-called Seaboard standards for cooperation set forth in the SEC’s Section 21(a) report in September 2001. Although the availability of non-prosecution agreements signals a potentially attractive opportunity for resolving cases without enforcement action, corporate issuers approaching the end of an SEC enforcement investigation would typically prefer for the matter to close with no agreement at all. The SEC’s statements thus far about the Carter’s Inc. Agreement offer little insight concerning when, in the SEC’s view, a non-prosecution agreement is more appropriate than concluding an investigation with no action against an entity.