In a Reuters Legal News article titled “Is now the time to seek relief from SEC industry bars and professional suspensions,” Victor Suthammanont writes that the Securities and Exchange Commission (SEC) has shown a recent willingness to grant relief to securities industry participants who have previously been permanently barred from associating with the securities industry, acting as officers or directors of public issuers, or participating in penny-stock transactions, as well as accountants and attorneys suspended from appearing or practicing before the SEC.
Over the past ten years, the SEC has barred or suspended people roughly 1,500 times, typically following the conclusion of SEC enforcement actions or the actions of other civil or criminal investigative agencies. Until recently, petitions for re-entry or reinstatement after being barred or suspended took extended periods of time to process, and, as Victor writes, “relief was rare—even to individuals who negotiated express rights to apply to the agency after a certain period as part of a settlement.”
But in late 2024, the SEC reinstated four suspended accountants. (Victor advised then-SEC Chair Gary Gensler on those reinstatements during his time as Enforcement Counsel to the Chair.) Then in April of this year, the SEC reinstated two more accountants and also lifted a bar on an investment-adviser representative and a penny-stock bar on another individual.
Victor notes that the SEC’s new willingness to act favorably on reentries and reinstatements may stem from the fallout of the June 2024 U.S. Supreme Court decision in SEC v. Jarkesy, et al., which held that the Seventh Amendment entitles a defendant to a jury trial when the SEC pursues civil penalties for securities fraud.
“To the extent that an SEC bar or professional suspension can be characterized as punitive, as opposed to remedial, it may give rise to a jury-trial right under Jarkesy,” Victor writes. He continues, “Allowing reentries and reinstatements may make them appear more of an equitable-type remedy where a right to a jury did not traditionally attach. This consideration may, in part, explain the four accountant reentries in 2024 and two in 2025, which were straightforward applications of the existing reinstatement process for accountants.”
In its April 2025 decision regarding a barred investment-adviser representative, the SEC stated that “it is in the public interest to allow barred individuals to reenter the industry if their individual circumstances demonstrate rehabilitation and increased risk-controls to prevent recidivism.” The agency noted that readmissions will encourage rehabilitation and remediation by other barred individuals. It also stated that it will no longer use a 17-year-old standard of only permitting readmission of barred individuals under “extraordinary circumstances.”
Taken together, Victor suggests that “These recent grants of reentry and reinstatement applications, as well as the abandonment of the extraordinary-circumstances test, may mean that individuals barred or denied the privilege of practicing before the SEC and their counsel should evaluate whether they meet the standards for reentry or reinstatement and consider applying.”
Read the full article PDF here.
About Victor
Victor served for a decade as an enforcement attorney at the U.S. Securities and Exchange Commission, including as a Senior Trial Counsel and, from October 2022 to January 2025, as the Enforcement Counsel to Chair Gary Gensler. Prior to his extensive experience in the SEC’s Division of Enforcement (“Enforcement”), Victor represented and advised clients in private practice in complex commercial disputes and litigations, as well as in internal and governmental investigations.
