Securities and Exchange Commission v. SolarWinds Corp.

Background

The SEC asked the court to modify one part of an order governing a settlement conference scheduled for September 12, 2024. The order required a corporation, government entity, or other non-natural person to send a representative who knew the case and had responsibility for determining the amount of any final settlement—in other words, someone with authority to decide what settlement authority to give counsel.

The SEC’s Request

The SEC stated that its governing statutes and rules made it impossible to provide a representative with binding settlement authority at the conference. According to the SEC, the agency has five Commissioners, and only the Commissioners may authorize the start of a securities-enforcement action or settle such an action. The SEC also stated that the Commissioners could not delegate on-the-spot settlement authority to a staff member, so any settlement proposal would have to be reviewed and accepted or rejected by the Commissioners.

The SEC asked to designate Associate Director Mark Cave as its representative. It described Cave as the Senior Officer most knowledgeable about the litigation and said he could make recommendations directly to the Commission. The SEC represented that, if the parties reached agreement on proposed settlement terms, its staff would promptly submit a formal recommendation to the Commissioners. The defendants’ counsel stated that they had no objection.

Ruling

Judge Barbara Moses stated: “Application GRANTED. SO ORDERED.” The order granted the SEC’s request to permit Mark Cave to represent the agency at the settlement conference. The opinion does not state that Cave received binding authority to approve a settlement; the SEC’s request contemplated that the Commissioners would still consider and approve any proposed settlement.