Required Reading for New Commissioners (Part 1)

Commissioners at the SEC, when the step down, often slip off quietly as they begin new careers elsewhere. Commissioner Aguilar, in contrast, has provided the Commission and his successors with a parting gift. He issued a public statement that included his advice to future commissioners. See Commissioner Aguilar's (Hopefully) Helpful Tips for New SEC Commissioners.  

The advice comes from an indvidual who has served on the Commission for seven years and served under four different chairs over two administrations (Chairs Cox, Schapiro, Walter & White).  Commissione Aguilar was there when the financial crisis struck and when Congress adopted Dodd-Frank and the JOBS Act.  His perspective is deep and unique.

We will not repeat the entire content of the statement.  There are, however, some very interesting observations that warrant particular mention.  

First, there is the impact of the Sunshine Act.  An idea that sounded good when it was adopted, the Act has had some unintended consequences on agency decision making process. Essentially, most agency meetings must be open to the public.  A meeting is any convocation of the number commissioners needed to make a decision.  See 5 USC § 552b. 

Thus, anytime three of five commissioners meet to discuss agency matters, they are arguably holding a meeting that must be open to the public.  As a result, it is very difficult to discuss agency matters in a collective matter.  As Commissioner Aguilar noted, the task often falls to the staff. 

  • Because of the Government in the Sunshine Act of 1975 (the “Sunshine Act”), your counsels will play a key role in communicating with the offices of other Commissioners and with the staff generally. The Sunshine Act generally requires that any time two or more Commissioners discuss Commission business, it needs to be done in a public forum. (Certain enforcement and administrative matters are excluded from this requirement.) The practical impact of this requirement is that it limits informal discussions between Commissioners and leaves much of the communication to take place between and among the Commissioners’ counsels. As a result, you will lean heavily on your counsels to gather, collect, and process information on your behalf, not to mention the “negotiations by proxy” that can take place among counsels on behalf of Commissioners.

This would invariably happen, with or without the Sunshine Act.  Nonethless, the Sunshine Act presumably increases the instances where negotiations take place in this manner.  


J Robert Brown Jr.