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SEC Has Two ‘Suspected’ Coronavirus Cases, Agency Official Says (1)

March 16, 2020, 3:19 PM; Updated: March 16, 2020, 5:26 PM

Two workers at the SEC’s Washington headquarters may have the new coronavirus, an agency official said in a court filing.

The Securities and Exchange Commission’s Enforcement Division has implemented an emergency policy of “either requiring or strongly encouraging telework for its personnel, depending on their individual circumstances and each employee’s physical proximity to the workstations of two suspected COVID-19 cases,” David Mendel, an SEC assistant chief litigation counsel, said in a letter to U.S. District Judge Alvin Hellerstein in New York March 13.

The policy likely will remain in place “at least for the next few weeks,” Mendel said.

The commission previously announced on March 9 one employee who works on the ninth floor of its headquarters had been referred for coronavirus testing. That worker hadn’t been in the building since March 5 and was believed to be “asymptomatic” while there, the agency said in an email then to employees.

Further details about the possible coronavirus cases weren’t immediately available Monday. An SEC representative didn’t immediately respond to a request for comment, but the agency said online Monday the Enforcement Division is “fully operational.”

Teleworking Challenges

The agency submitted the letter mentioning two potential coronavirus cases as part of its litigation against tech startup Kik Interactive Inc. in the U.S. District Court for the Southern District of New York. The SEC brought the case against Kik in 2019, saying the company illegally raised $100 million from an initial coin offering.

Mendel in his letter asked Hellerstein whether the commission could hold off on delivering hard copies of filings for now due to the coronavirus. The agency still can submit material electronically “barring additional hardships caused by the Coronavirus,” Mendel said.

“The telework policy means that the SEC does not have personnel on site who can perform the necessary printing and binding of hard copies of court filings, or who can transfer to media (such as CDs) electronic copies of those filings,” he said.

The SEC and Kik “may file as practical,” Hellerstein said in a handwritten note on the agency’s letter.

The case is SEC v. Kik Interactive Inc., S.D.N.Y., No. 1:19-cv-05244, 3/13/20.

(Updated with additional reporting throughout.)

To contact the reporter on this story: Andrew Ramonas in Washington at aramonas@bloomberglaw.com

To contact the editors responsible for this story: Michael Ferullo at mferullo@bloomberglaw.com; Seth Stern at sstern@bloomberglaw.com

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