The Securities and Exchange Commission (SEC) doesn’t have criminal enforcement authority.

But it does have a deferred prosecution agreement program.

For both individuals and companies.

And just last week, the SEC entered into its first deferred prosecution agreement with an individual — Scott Herckis — a former hedge fund administrator who helped the agency take action against a hedge fund manager who stole investor assets. Herckis served as an administrator for the Connecticut-based Heppelwhite Fund LP.

Herckis was represented by Bridget Moore of Baker Botts in Washington, D.C.

What are the benefits of settling an SEC case with a deferred prosecution agreement compared to a consent decree?

“Generally speaking, in a deferred prosecution agreement, the SEC is saying that they are going to forgo charges if this individual or company abides by the agreement,” Moore told Corporate Crime Reporter in an interview last week. “In your typical consent decree, charges are brought against you. In the normal course, you neither admit nor deny. But charges are brought and it certainly is a reportable event.”

By reportable event you mean?

“If you are filling out an application, you might be asked — have you ever been enjoined?” Moore said. “The answer is yes, you have been. Under a deferred prosecution agreement, after the five years have passed — or whatever the term of the agreement is — if you abide by the terms of the agreement, it is essentially gone.”

The benefit is it wipes the slate clean?

“Yes,” Moore said. “It’s certainly nice at the end of it to have something that has been dismissed.”

Can you get both a whistleblower award and a deferred prosecution agreement?

“It’s fact specific,” Moore said. “The SEC has made clear that an individual who doesn’t have perfectly clean hands can still reap a reward. It would be a little tough. But it’s very fact specific.

The SEC would be very careful to reward an individual who had unclean hands.”

Can you envision a situation where both an individual and the company the individual works for would get a deferred prosecution agreement?

“One of the criteria they look at is the information provided to the SEC and the value of that information,” Moore said. “I can see a case where the company was forthright, did all they could to remedy a situation, was a great corporate citizen. And they get a deferred prosecution agreement.”

“And then if you had an individual who helped the investigation along considerably and was able to meet the other criteria, that could happen. I could envision a situation where both an individual and a company could go after the same thing. I’m not sure we would ever see it though.”

We asked Moore if she was picking up on policy changes since Mary Jo White came in as chair?

“I see an increased emphasis on insider trading,” Moore said. “I see the SEC being open to settling cases in different ways. They have been more aggressive on neither admit nor deny. We are seeing an agency bringing cases fast and furious.”

More aggressive in enforcement, but more understanding in settlement?

“Not more understanding, but more willing to use the cooperation program that they set up to offer alternative ways to settle,” Moore said. “They are looking to hold a company or an individual responsible. But they are willing to look at other factors on how they got there, to consider those and see if they if there is a different way to settle the matter.”

What is your sense as to which way they are moving on neither admit nor deny?

“It will be interesting to see how it shakes out for individuals,” Moore said. “In the short term, it probably will be limited to these larger alleged financial frauds and the like. It will be interesting to see how it plays out for the cases more on the line. Maybe cases where there is not criminal exposure. The reason behind it is to hold individuals and companies responsible for conduct. I think they will limit it properly. But only time will tell about the cases on the margin.”

[For the complete transcript of the Interview with Bridget Moore, see 27 Corporate Crime Reporter 44(13), November 20, 2013, print edition only.]