A federal judge in Milwaukee has criticized the Securities and Exchange Commission for being too soft with corporate enforcement, marking the second time the agency has been criticized for weak settlements in the past month, reports the Huffington Post. Last month, U.S. District Judge Jed Rakoff put the kibosh on the agency’s $258 million proposed settlement with Citibank. Now, Judge Rudolph Randa has told the SEC that its proposed settlement with the Koss Corp. is too vague and asked the agency to provide more facts by Jan. 24. In October the SEC charged Koss Corp., a headphone-manufacturer, with accounting fraud.
Wednesday’s ruling is the latest in a string of actions by federal judges to challenge the way the government agency enforces regulations. The decision underscores the significance of the November ruling by Judge Rakoff to toss out the proposed settlement between the SEC and Citigroup that didn’t have enough facts and did not force the corporation to admit guilt. The SEC responded that the proposed agreement was business as usual, but the two decisions indicate the status quo may be changing.