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53 Am. Crim. L. Rev. 693 (2016)
Systematic Forum Selection Ambiguity in Financial Regulation Enforcement

handle is hein.journals/amcrimlr53 and id is 702 raw text is: SYSTEMIC FORUM SELECTION AMBIGUITY IN FINANCIAL REGULATION ENFORCEMENT Eithan Y. Kidron* ABSTRACT The growing use of administrative proceedings in financial regulation, as an alternative to criminal enforcement, has raised concerns about forum selection ambiguity. These concerns led to challenges of forum selection ambiguity for under-criminalization, expropriation of defendants' rights, and harm to the prin- ciple of legality. Contemporary literature identifies ambiguity in forum selection and describes it as a discretionary problem. Much of today's literature therefore calls for clear forum selection guidelines. As a step towards addressing the ambiguity problem, the SEC recently issued guidance on its approach to forum selection in contested actions. This Article suggests that the SEC has taken a step in the wrong direction. Contrary to the current literature, I argue that forum selection ambiguity does not stem from the lack of clear policy guidelines, but rather from the legal theory behind them, which has created systemic ambiguity in punitive forum selection. Due to this ambiguity, not only can the regulated entity, on its part, not know in advance whether its conduct will be deemed criminal or administrative, but the regulator herself cannot justify her forum selection decision coherently. INTRODUCTION Forum selection ambiguity in financial regulation has drawn a lot of attention recently. As is well known, financial regulation makes extensive use of criminal law as a means of enforcement. The use of criminal law, however, is problematic in the financial field because in many cases criminal means are perceived as both unjust and inefficient.' One solution has been the creation of an administrative * Lecturer, Tel Aviv University, Faculty of Law. The author would like to thank Itay Fiegenbaum, Shai Lavi, Sharon Hannes, Shay N. Lavie, and Simon J. Rabinovitch, as well as participants in the Visiting Scholar Colloquium at Harvard Law School, and participants in the 3rd TAU Workshop for Junior Scholars in Law Theory Coming to Life. The author would also like to thank the Tel-Aviv University Faculty of Law for their helpful comments and suggestions. This Article has been made possible with the help of the Zvi Meitar Center for Advanced Legal Studies scholarship. © 2016, Eithan Y. Kidron. 1. See, e.g., Anthony Ogus, Criminal Law and Regulation, in ENCYCLOPEDIA OF LAW AND ECONOMICS: CRIMINAL LAW AND ECONOMICS 90, 90-110 (Nuno Garoupa ed., 2d ed. 2009) (suggesting that the identification of criminal law with regulation is problematic, in part on the basis of the fact that most regulatory offenses do not require mens rea); Marilyn E. Walsh & Donna D. Schram, The Victim of White-Collar Crime: Accuser or Accused?, in 13 WHITE-COLLAR CRIME: THEORY AND RESEARCH 32, 36 (Gilbert Geis & Ezra Scotland eds., 1980) ([Many frauds and larcenies by trick or false pretenses can be viewed as excesses in what is normally accepted, aggressive salesmanship or shrewd economic behavior.); Stuart P. Green, Moral Ambiguity in White Collar

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