Recently, the SEC was severely criticized for violating the Department of Treasury’s offset program when it sent a notice of intent to use this program to a wrong address of a securities violator. This program allows government agencies to seize various assets that may be attributable to those it has a judgment against.
The Court criticized the SEC because it ignored the defendant’s filing of a change of address. Instead, the SEC sent the notice to the defendant’s last known address – the one he had used before he started serving a prison term for securities fraud. A fact the SEC knew well since it had provided the evidence as part of the criminal investigation.
As a result, the Court ordered the SEC to cease using this program, and reimburse the defendant for monies wrongfully seized. The Court required the SEC to use the proper notice if it plans on using the Treasury’s program again.