Theses Doctoral

Do Politics Matter to this Watchdog? The Effects of Ideology on Civil Enforcement at the U.S. Securities and Exchange Commission

Sivolella, John Joseph

My goal in this dissertation is to examine whether the political ideology of the federal courts, as well as the ideology of political principals in Congress and the executive branch, affect the decision making and behavior of an independent U.S. agency. The agency's decision making pertains specifically to the application of its powers both directly through its politically appointed leadership and bureaucrats, and indirectly through a private litigation regime, in a policy area - civil enforcement - that should normatively be mostly free from politics. As a foundation for the study, I analyze the public civil enforcement program and related policy and procedural components of the United States Securities and Exchange Commission (SEC) to determine whether political ideology - and other factors - influence the agency's strategic decision making and behavior relating to its direct bureaucratic powers of civil prosecution. I generally focus the analysis on the SEC's selection of forum in enforcement cases. My research examines whether the agency is less likely to utilize the forum of federal court for civil enforcement actions, and will opt instead for an administrative forum, when the ideology of the court that will likely hear a case is conservative, and whether the agency is more likely to utilize the federal court system when the ideology of the court that will likely hear a case is liberal. My analysis supports a conclusion that although the characteristics of individual civil enforcement cases play a prominent role in the SEC's strategic decision making, the impact of political ideology is significant and comparable in magnitude. The data analysis reveals that the ideology of the lower federal courts at the district level is a material factor in the strategic decision making of the SEC in its enforcement program. It also shows that the politics of some of the agency's political principals -congressional committees responsible for the oversight and annual budget of the SEC - significantly affect the agency's strategic enforcement behavior. This element of my research extends a line of political science literature that analyzes who controls the federal bureaucracy. I then use a different research perspective to broaden my analysis of the SEC's enforcement behavior by examining its measured role in private securities litigation as a strategic extension of its public civil enforcement program, and explain how the agency carefully leverages the private regime to help achieve its enforcement mission. In this part of the dissertation, I conclude that the SEC actively and directly participates in the private enforcement regime through a strategic program of filing amicus curiae briefs, and participates indirectly through the fruits of its public civil enforcement litigation. This component of the dissertation rounds out my analysis by revealing an unexpected strategic dimension the agency leverages to achieve its mission.


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More About This Work

Academic Units
Political Science
Thesis Advisors
Shapiro, Robert Y.
Ph.D., Columbia University
Published Here
July 16, 2013