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Statement on Decision of the D.C. Circuit on Retroactive Collateral Bars

Commissioner Daniel M. Gallagher and Commissioner Michael S. Piwowar

July 22, 2015

In a unanimous decision, the U.S. Court of Appeals for the District of Columbia Circuit recently held that the U.S. Securities and Exchange Commission cannot apply a provision contained in the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank)[1] to bar an individual from associating with municipal advisors and nationally recognized statistical rating organizations based on pre-Dodd-Frank conduct, because such an application is impermissibly retroactive.  Koch et al. v. SEC (D.C. Cir. July 14, 2015).[2]

We are pleased with the Court’s holding, which vindicates our vocal opposition to such bars since joining the Commission.  Not only have we dissented from every vote to impose such retroactive collateral bars since we joined the Commission, but we have also publicly criticized the majority’s legal analysis with respect to the imposition of such bars: Commissioner Piwowar in remarks delivered to the Los Angeles County Bar Association on November 22, 2013,[3] and Commissioner Gallagher in a written dissent in the matter of John W. Lawton dated August 5, 2014.[4]  And we acknowledge that our predecessors, Commissioners Kathleen Casey and Troy Paredes, also were outspoken on the topic of impermissible retroactive application of the securities laws.[5]   

The Commission should promptly take appropriate action to address all impermissibly retroactive collateral bars that have been misapplied since the enactment of Dodd-Frank.

[1] Sec. 925, Pub. L. No. 111-203, 124 Stat. 1376 (2010).

[4] Available at  See also (majority opinion).  The Commission’s majority opinion reversed the initial decision of Chief Administrative Law Judge Brenda P. Murray, who found the collateral bars to be impermissibly retroactive.  Her initial decision is available at  

[5] See Commissioner Kathleen L. Casey, Address to Practising Law Institute's SEC Speaks in 2011 Program (Feb. 4, 2011), available at; Commissioner Troy A. Paredes, Statement at Open Meeting to Propose Rules Regarding Disqualification of Felons and Other “Bad Actors” from Rule 506 Offerings (May 25, 2011), available at

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