The Seventh Circuit today accused the Securities and Exchange Commission of "grinding down a corporation" because "the agency (or its senior staff) is in a snit" over the "firm’s refusal to kowtow" to it. The language resulted from the SEC’s decision to classify the outfit (correctly) as an "investment company" but its refusal (which the court deemed incorrect) to recognize that the enterprise qualified for a statutory "exception" to the definition of "investment company". But the court also noted that the SEC offered two routes of escape — either by cutting its holdings of "investment securities" or by applying for (and receiving) an exemption. SEC v. Nat’l Presto Industries, Inc., No. 05-4612 (7th May 15, 2007).
Blawgletter wonders what provoked castigation of an agency whose error consisted in offering an "exemption" while rejecting an "exception" but will leave you to draw your own conclusions.
Barry Barnett
