US agencies such as the SEC, the CFTC and the FTC have extensive enforcement powers to seek significant financial penalties and limit or otherwise affect conduct through court injunctions or administrative orders. Companies and executives under investigation and threatened with enforcement actions by these agencies often choose to settle rather than litigate. Historically, from as cost-benefit analysis, settlement is preferable to the cost of litigation and the long term risks of extensive fights with agencies that would continue to be their regulators.
But it is worth revisiting litigating against the government in light of recent developments. The SEC and other civil agencies are seeking more draconian financial penalties and limitation on important business activities that may affect the cost benefit calculus such that settlement may not be the right choice. Further, defendants may now be on more equal footing in litigating against the government. Recent 5th Cir. decision ruled as unconstitutional SEC administrative proceedings, typically viewed as giving the government home court advantage. Now the SEC bring their litigated cases almost entirely before federal district court, with defendants’ right to jury and other benefits.