Aguilar has long expressed concern that SEC enforcement actions can be too soft to serve as deterrents.
Based on a search of the SEC’s Web site, there have been only two posted dissents to the agency’s administrative enforcement actions since the beginning of 2004.
Aguilar’s action suggests “that it’s a pretty strongly held view,” said David B.H. Martin of the law firm Covington & Burling, a former senior SEC official.
The dissent comes weeks after the SEC took flak for negotiating a $153.6 million fine from J.P. Morgan Chase in another enforcement case but taking no action against any of the firm’s employees or executives.
Under a settlement announced Tuesday, the SEC alleged that former Morgan Stanley trader Jennifer Kim and a colleague who previously settled with the agency had executed at least 32 sham trades to mask the amount of risk they had been incurring and to get around an internal restriction.
Kim and her colleague entered and promptly canceled the fake trades to fool a Morgan Stanley risk management system, the SEC said.
Their trading contributed to millions of dollars of losses at the investment firm, the SEC said.
Without admitting or denying the SEC’s findings, Kim agreed to pay a fine of $25,000.
She was barred from working for a brokerage firm but can apply for relief from that sanction after three years.
The SEC said Kim “willfully violated” a section of the law that prohibits “knowingly circumventing or knowingly failing to implement a system of internal accounting controls or knowingly falsifying any book, record or account.”
Aguilar said the settlement was “inadequate” and “fails to address what is in my view the intentional nature of her conduct.”
“The settlement should have included charging Kim with violations of the antifraud provisions,” Aguilar wrote.
SEC Chairman Mary L. Schapiro declined to comment on Aguilar’s dissent.
A Morgan Stanley spokesman declined to comment. A lawyer for Kim did not respond to requests for comment.