Full opinion text
Opinion PER CURIAM. Circuit Judge SILBERMAN filed a separate opinion. Circuit Judge RANDOLPH filed a separate opinion. District Judge REYNOLDS filed a separate opinion, concurring in part and dissenting in part. PER CURIAM;: The case is remanded to the Commission for a more adequate explanation of its interpretation of Rule 2(e)(l)(ii) and its application to this case. The court rejects unanimously, as per Part V of Judge Randolph’s opinion, petitioners’ challenge to the regularity of the Commission’s proceedings. So Ordered. SILBERMAN, Circuit Judge: The Commission suspended petitioners, partners in a national accounting firm, for “improper professional conduct” under Rule 2(e)(l)(ii). As I cannot determine from the order just what the Commission is using as its standard for improper professional conduct, I think the appropriate course is to remand (which we do) for the Commission to clarify its position before we substantively review the order. See Philadelphia Gas Works v. FERC, 989 F.2d 1246, 1261 (D.C.Cir.1993). I. Savin Corporation, a publicly traded company that for many years had successfully marketed photocopiers built by other companies, decided in the late 1970s to develop its own machines — a failed effort that gave rise to this case. Between 1977 and 1985, Savin contracted with an inventor to design a machine, employed over 500 employees in its Engineering and Manufacturing division, and built and tested a number of prototypes of the various designs for the elusive copier. Faced with the mounting costs of the endeav- or, Savin in 1980 explored ways that it could defer its expenditures as a capitalized asset instead of declaring them as ordinary business expenses. Generally accepted accounting principles (GAAP), however, do not permit research and development costs to be deferred: “All research and development costs encompassed by this Statement shall be charged to expense when incurred.” Accounting FOR RESEARCH AND DEVELOPMENT Costs, Statement of Financial Accounting Standards No. 2, ¶ 12 (Fin. Accounting Standards Bd.1974) [hereinafter FAS 2]. Savin in 1981 nevertheless formulated an accounting policy whereby it could define its expenditures related to the copier project not as research and development costs but rather as “start-up” costs, which the company believed could be “deferred and matched when normal production cycle is reached.” Following the policy, the company deferred approximately $37 million from fiscal year (May 1 to April 30) 1981 to December 31, 1984. David Checkosky was the engagement partner and Norman Aldrich was the audit manager for Coopers & Lybrand’s audits of Savin’s financial statements, which were all submitted to the Commission. Both consulted with Savin as the company developed its accounting policy’s interpretation of FAS 2 that forms the core controversy of this case. Coopers & Lybrand, through Checkosky and Aldrich, issued audit reports for Savin’s financial statements for fiscal years 1981 through 1983 which represented that the audits were conducted according to generally accepted auditing standards (GAAS) and which gave the auditors’ unqualified opinion — i.e., without reservations — that the statements were presented in conformity with GAAP. The audit reports for fiscal year 1984 and the period between April 30 to December 31, 1984, contained the auditors’ opinion that the financial statements conformed with GAAP subject to one qualification: that Savin’s deferred start-up costs would eventually be recovered after successful manufacture and marketing of the copier. Savin abandoned its plans to develop a new copier in 1985, having never manufactured or marketed a single machine. In 1987, the Commission initiated this disciplinary proceeding against Checkosky and Aldrich for “improper professional conduct” in violation of the Commission’s Practice Rule 2(e), 17 C.F.R. § 201.2(e)(1)(ii) (1993), with respect to their audits of Savin. The Commission alleged that Cheekosky and Aid-rich had misrepresented that the financial statements were in conformity with GAAP when they certified that Savin has properly deferred its costs associated with the copier project. Moreover, Cheekosky and Aldrich had violated GAAS by failing to exercise professional due care in planning and performing the audits and in preparing the audit reports. The administrative law judge agreed that the auditors had violated Rule 2(e)(l)(ii) and suspended them from practicing in front of the Commission for five years. Despite contrary arguments from Cheekosky and Aldrich, the ALJ held that “improper professional conduct” within the meaning of the Rule does not require scienter; their violation of GAAP and GAAS alone suffices. After an independent review of the record, the Commission affirmed the ALJ’s conclusion that the auditors had violated GAAP and GAAS and that scienter is not required to state a violation of Rule 2(e)(l)(ii) — and noted that the auditors’ conduct “did in fact rise to the level of recklessness.” The Commission concluded that the auditors’ conduct warranted only a two-year suspension and reduced the ALJ’s sanction accordingly. Cheekosky and Aldrich petition for review of the Commission’s order, arguing that it had no statutory authority to promulgate Rule 2(e). They claim further that the Commission’s order is not supported by substantial evidence and, in any event, that Rule 2(e)(l)(ii) could apply only to willful misconduct of the sort that would constitute scien-ter for substantive violation of the securities laws. Petitioners also argue that alleged procedural improprieties in the Commission’s decisionmaking process deprived them of due process of law, a contention that we reject for the reasons stated in Part V of Judge Randolph’s opinion which follows. II. Petitioners’ general challenge to the Commission’s authority to issue Rule 2(e)— entitled Suspension and Disbarment — has been addressed by two other courts, and I would add little to their well-crafted opinions. The Second Circuit in Touche Ross & Co. v. SEC, 609 F.2d 570 (2d. Cir.1979) — whose reasoning the Ninth Circuit adopted in Davy v. SEC, 792 F.2d 1418, 1421 (9th Cir.1986)— held that Rule 2(e) was validly promulgated under the Commission’s “ ‘broad authority to adopt those rules and regulations necessary for carrying out the agency’s designated functions.” Touche Ross, 609 F.2d at 580 (quoting Commercial Capital Corp. v. SEC, 360 F.2d 856, 857 (7th Cir.1966)). Inherent in this authority is the power to protect the integrity of the agency’s administrative processes: Although there is no express statutory provision authorizing the Commission to discipline professionals appearing before it, Rule 2(e), promulgated pursuant to its statutory rulemaking authority, represents an attempt by the Commission to protect the integrity of its own processes. It provides the Commission with the means to ensure that those professionals, on whom the Commission relies heavily in the performance of its statutory duties, perform their tasks diligently and with a reasonable degree of competence. As such the Rule is “reasonably related” to the purposes of the securities laws. Touche, 609 F.2d at 582 (citing Mourning v. Family Publications Serv., Inc., 411 U.S. 356, 369, 93 S.Ct. 1652, 1660, 36 L.Ed.2d 318 (1973)). The Second Circuit relied on the line of cases which held that administrative agencies have the power, under their general rulemak-ing authority, to prescribe standards of practice for attorneys practicing before them and to discipline those who fail to conform. See Goldsmith v. Board of Tax Appeals, 270 U.S. 117, 122, 46 S.Ct. 215, 217, 70 L.Ed. 494 (1926); Herman v. Dulles, 205 F.2d 715, 716 (D.C.Cir.1953). And we have since reaffirmed this principle: “There can be little doubt that the Commission, like any other institution in which lawyers or other professionals participate, has authority to police the behavior of practitioners before it.” Polydoroff v. ICC, 773 F.2d 372, 374 (D.C.Cir.1985). Importantly, the court in Touche clearly distinguished the Commission’s authority to discipline professionals from its substantive enforcement functions, see 609 F.2d at 579, since under the 1934 Act’s jurisdictional provision, 15 U.S.C. § 78aa (1988), district courts have exclusive jurisdiction over violations of the securities laws. The Commission had promulgated Rule 2(e) not to augment its enforcement arsenal but to protect its administrative processes, and the court correctly recognized that the Commission may not “usurp the jurisdiction of the federal courts to deal with ‘violations’ of the securities laws.” Touche Ross, 609 F.2d at 579. Rule 2(e), therefore, is analytically distinct from substantive provisions of the securities laws, and cases which involve those provisions, e.g., Ernst & Ernst v. Hochfelder, 425 U.S. 185, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976); SEC v. Steadman, 967 F.2d 636 (D.C.Cir.1992), are inapposite to the question at hand. Petitioners argue further that even if the Commission may police practitioners before it, its authority does not extend to disciplining professionals for negligence. If the purpose of Rule 2(e) is to protect the integrity of administrative processes, then sanctions for improper professional conduct under 2(e)(1)(h) are permissible only to the extent that they prevent the- disruption of proceedings. Punishment for mere negligence, so the argument goes, extends beyond this realm of protective discipline into general regulatory authority over a professional’s work. This argument has not been squarely addressed by the courts of appeals, see Davy v. SEC, 792 F.2d 1418, 1422 (9th Cir.1986) (reserving judgment on the SEC’s power to determine standards for discipline under the Rule). But, as I discuss in Part IV, since it is unclear whether the Commission actually applied a simple negligence standard in this case — or, for that matter, what standard the Commission actually did apply — the question is not yet properly presented. III. Since we remand for the Commission to clarify its opinion as to the standard of conduct it applied to petitioners, it might be thought premature to consider whether there is substantial evidence to support the Commission’s determination that petitioners violated Rule 2(e). But, at minimum, the Commission must establish that petitioners misinterpreted GAAP and violated GAAS in the course of their audits. For the reasons Judge Randolph recites in Part III of his opinion, I agree that substantial evidence supports the Commission’s conclusions in this regard, although I do not think the second question is as difficult as does Judge Randolph. There is, furthermore, somewhat more evidence against petitioners than is discussed in Judge Randolph’s opinion. For example, the Savin accounting policy, which was adopted in consultation with and certified by petitioners, prescribed a subjective standard for deferring development costs: when Savin reaches “a comfort level” of marketability and when it “believes that the product will satisfy the customer.” Such a standard, however, was explicitly considered and rejected by the Financial Accounting Standards Board when it adopted FAS 2, which employed a neutral criteria “that could be objectively and comparably applied by all enterprises.” See ACCounting FOR Researoh and Development Costs Statement of Financial Accounting Standards No. 2, ¶¶ 53, 54 (Fin. Accounting Standards Bd.1974). Moreover, I would specifically note several additional instances where Savin’s copier program failed even petitioners’ own benchmark for when the project passed out of research and development. Savin’s accounting policy defined research and development to include “[djesign, construction and testing or pre-production prototypes and models” and “[pjrototype pre-manufacturing activity.” For all the relevant years, petitioners’ own testimony and notes indicate that they considered the copiers to be prototypes and not manufactured, marketable products. During the 1981 audit, petitioners allowed Savin to defer costs incurred “after completion of first successful prototype (Nov. ’80).” In' 1982, petitioners observed a “working prototype” but inexplicably concluded that “the company was past the prototype stage.” In 1984, the auditors’ notes indicate that “final working prototypes had to be constructed.” And the copiers — prototypes or otherwise — never met Savin’s prescribed standards for quality and marketability. Savin’s design specifications called for no more than 66 failures per million copies, and a 1983 report by McKinsey & Co. concluded that the copier’s market viability depends on a failure rate of no more than 62 per million copies. In November 1982, the copiers were producing 1,900 failures per million copies. In April 1983, a new copier model registered 3,000 failures per million copies, and in March 1984, the copiers were performing at 700 to 1,000 failures per million copies. Finally, I do not think (contrary to Judge Randolph) petitioners have much of an argument against the Commission’s finding that they had failed to conduct their audits in accordance with GAAS. Independent auditors are charged with the responsibility of casting a skeptical eye on information they are required to verify. See United States v. Arthur Young & Co., 465 U.S. 805, 818, 104 S.Ct. 1495, 1503, 79 L.Ed.2d 826 (1984). In 1981, Checkosky made the crucial decision that Savin’s expenses associated with the copier project were no longer research and development and could be deferred as start-up costs. Judge Randolph correctly notes that the basis for this decision was a visit to Savin’s offices where Checkosky saw a working prototype making copies. But there is more that is left unmentioned. The audit papers for 1981 contain no documentation for the visit. Checkosky did not record what he saw, did not question whether the prototype — besides making copies — met other critical specifications, and made no other efforts to ascertain whether the copier was ready for manufacture. Throughout its development, Savin’s copier suffered obviously crippling defects. The prototypes had a habit of leaking thick black toner liquid onto the floor, at times forming a six-foot pool in front of the machine. And the copiers were hot. According to one testing engineer, the copier “could have been used as a furnace as well as a copying machine, because that’s what it was.” The problem was grave enough for the project’s technical manager to be concerned that the copier would violate OSHA standards for office safety, but not enough to raise petitioners’ vigilance. Petitioners counter that there is no evidence that they knew of the copier problems .and that no auditing standards required them to seek such information independently. However, since the feasibility, reliability, and marketability of the copier are essential considerations even in petitioners’ own interpretation of FAS 2, petitioners’ claim that they had no duty to verify these factors in certifying that the costs were deferred properly under GAAP is tenuous. IV. The Commission determined that petitioners violated 6AAS and misrepresented that Savin’s statements complied with GAAP. (The ALJ put it in terms of “violating” both GAAP and GAAS.) The Commission thus suspended petitioners, stating: “We affirm the law judge’s holding (and reaffirm prior Commission precedent) that proof of bad faith or willful misconduct is not a prerequisite for the imposition of sanctions pursuant to Rule 2(e)(l)(ii) of the Commission’s Rule of Practice.” Nevertheless, the Commission’s opinion is ambiguous. The Commission declared that bad faith is not a prerequisite for a violation, but does not specify the state of mind both necessary and sufficient to constitute a violation in light of its past precedents. In In re Logan, 10 S.E.C. 982 (1942), the Commission suggested in dictum that good faith is a defense under subelause (ii) of the Rule: “[I]f the evidence showed that Logan in good faith held himself out as an independent accountant, we should not hold him ... to have engaged in improper and unethical professional conduct merely by reason of the fact that he was found to be not in fact independent.” Id. at 985. Ten years later, without mentioning Logan, the Commission stated that good faith is not a defense under Rule 2(e), holding that discipline is warranted when the accountants’ conduct is “so deficient” that it constitutes “their failure to give this professional undertaking the degree of care and inquiry it demanded under the circumstances.” In re Haskins & Sells, Accounting Series Releases No. 73 [1937-1982 Transfer Binder] Fed.See.L.Rep. (CCH) ¶ 72,092, at 62,197 (Oct. 30, 1952). But in In re Carter, [1981 Transfer Binder] Fed.Sec. L.Rep. (CCH) ¶ 82, 847, at 84, 145 (Feb. 28, 1981), after discussing at length the difficulties with prescribing a generalized standard of conduct for professionals who must exercise judgment in their work, the Commission appeared to return to the Logan standard: “So long as a lawyer is acting in good faith and exerting reasonable efforts to prevent violations of the law by his client, his professional obligations have been met.” Id. at 84,172-73. Faced with these conflicting precedents, the Commission failed to clearly choose its present position. The opinion below cited Haskins & Sells and In re Schulzetenberg, Admin.Proc. 3-6881, slip. op. at 2 (Nov. 10, 1987), for the proposition that good faith is not a defense (at least for an auditor) to a Rule 2(e) proceeding. But the Commission did not mention Logan, and distinguished Carter by noting that the case “explicitly acknowledged the differences in the duties attorneys owe to their clients and the duties auditors owe to the public.” Other than asserting these differences, however, the Commission did not indicate why these differences were relevant to Rule 2(e) or- — even if they are cognizable differentiations under the Rule — how the standard of conduct required of accountants contrasts with that demanded of lawyers. See, e.g., United States v. Arthur Young & Co., 465 U.S. 805, 817-19, 104 S.Ct. 1495, 1502-03, 79 L.Ed.2d 826 (1984). In Schulzetenberg, a case involving auditors, the Commission did face the specific defense raised in this case that “mere negligence does not warrant disciplinary action under Rule 2(e).” The Commission rejected the claim with the statement, “We have always recognized that an incompetent or negligent auditor can do just as much harm to public investors and others who rely on him as one who acts with an improper motive.” But Schulzetenberg, astonishingly, was unpublished. As such, it is, of course, not acceptable authority under the APA, and thus it cannot provide the necessary indication of the Commission’s interpretation of “improper conduct” as applied to auditors. See 5 U.S.C. § 552(a)(2). Significantly, the SEC never stated unequivocally that petitioners were negligent and that their negligent acts, without more, constitute a violation of Rule 2(e). It may well be fair to infer, as Judge Randolph does, that a transgression of GAAS is itself negligence although the SEC does not explicitly so declare. In any event, the Commission never forthrightly articulated the standard it applied to petitioners. The closest that it came to doing so is its assertion, “Although we have stated that a mental awareness greater than negligence is not required to impose sanctions against an accountant pursuant to Rule 2(e) ...” (emphasis added). It is not at all clear, however, whether the Commission is referring to its precedent discussed above (which, as indicated, is by no means pellucid) or whether it means one should have derived that proposition from its earlier discussion of this ease (in which it is never so stated in haec verba). Given its disparate precedent, what is missing from the Commission opinion is the flat declaratory statement that an accountant’s negligence (a failure to comply with GAAP and GAAS) in performing an audit will constitute a violation of Rule 2(e) — a statement which the ALJ did make. .The Commission seems to be suggesting that its determination that an accountant violated Rule 2(e) can be defended in court if the accountant is negligent but, at the same time, is not necessarily committing itself to the proposition that all failures to comply with GAAP and GAAS will constitute Rule 2(e) violations, i.e., that negligence alone is improper professional conduct. To be sure, the difference is a subtle one, but in light of the possible implications concerning the validity of Rule 2(e)(ii) if it is meant to sweep so broadly, it is a difference with enormous significance. If the Commission were to determine that an accountant’s negligence is a per se violation of Rule 2(e), it would have to consider not only the administrative burden such a position would entail but also whether ■it would constitute a de facto substantive regulation of the profession and thus raise questions as to the legitimacy of Rule 2(e)(l)(ii) — or at least its scope. See supra at 456. (Perhaps the Commission’s reluctance to take plainly that course explains why Schulzetenberg was never published.) It simply will not do for an agency to indicate that it has the authority to enunciate a proposition of administrative law — and to suggest that in the case before it the proposition, if it were adopted, would apply — without assuming the full administrative law burden of declaring the proposition. And so, it does not seem to me that the Commission adopted the sweeping position that petitioners (and Judge Randolph) describe. Petitioners understandably attacked the Commission’s opinion at its soft point and argued that the Commission embraced unequivocally the negligence standard for “improper conduct.” The Commission’s counsel also maintained before us that “the Commission has found that negligent conduct will give rise to discipline under the ‘improper professional conduct’ standard of Rule 2(e)(l)(ii),” which comes close to saying that an auditor’s negligence is improper conduct. But, of course, we cannot credit an agency counsel’s presentation of a position not clearly adopted by the agency. See KN Energy, Inc. v. FERC, 968 F.2d 1295, 1303 (D.C.Cir. 1992). The Commission itself appears to have assumed that it did not need to declare squarely that an accountant’s negligent auditing is “improper conduct” because the Commission “note[d] that Respondents [sic] conduct in this case did, in fact, rise to a level of recklessness” (“noted” is a rather unusual term to introduce an alternative holding). The Commission, however, never analyzed the evidence to explain just how petitioners’ conduct could be thought to pass beyond negligence to the greater degree of culpability-recklessness. Nor did the Commission specify just what meaning it was giving the term reckless: Did the Commission define recklessness as a “higher form of ordinary negligence” or as “ ‘a lesser form of intent’ ”? SEC v. Steadman, 967 F.2d 636, 641-2 (D.C.Cir.1992) (citation omitted). The Commission’s determination that petitioners were reckless — and that recklessness would constitute improper professional conduct whether or not negligence did — prevents us from holding that the Commission’s order is arbitrary and capricious even if we were to conclude (as does Judge Randolph) that the Commission had squarely determined that an auditor’s negligence was improper professional conduct. Obviously, we cannot hold an agency’s action unlawful if one of two alternative grounds is an acceptable basis to justify that action. It may well be that the essential substantive difference between Judge Randolph and myself lies in his conclusion that under no circumstances may the Commission rest its order on a determination that petitioners were reckless. Petitioners do claim in a footnote (upon which Judge Randolph substantially expands) that recklessness is not now and cannot be an acceptable alternative ground for the Commission’s suspension order, arguing that since the accusation of recklessness was not raised until after the proceedings in front of the ALJ, the Commission violated principles of due process and fair notice when it asserted that petitioners were reckless. See In re Ruffalo, 390 U.S. 544, 550-52, 88 S.Ct. 1222, 1225-27, 20 L.Ed.2d 117, modified on other grounds, 392 U.S. 919, 88 S.Ct. 2257, 20 L.Ed.2d 1380 (1968). There is little to this argument. In Rujfalo, the Court held that an attorney may not be disbarred for engaging in a conspiracy to solicit clients where the charge of conspiracy was not added until after the defendant had testified. Here, the charge in the Commission’s Order for Private Proceedings is that petitioners violated Rule 2(e)(l)(ii), and the Order did not specify the mental state required to state such a violation. Judge Randolph observes that the order provided that hearings “would be held on the Chief Accountant’s allegations,” presumably implying that the proceedings are thereafter limited to only those allegations. But the Chief Accountant did not assert, in his allegations, the degree of mental culpability with which petitioners acted. He only claimed that petitioners “failed to adhere to generally accepted auditing standards” and that their opinions “were not presented in conformity with generally accepted accounting principles.” Petitioners’ state of mind was specifically-addressed when petitioners claimed before the ALJ that in order to state a violation of Rule 2(e), the Chief Accountant must show not only that they violated GAAP or failed to conduct the audit accordingly to GAAS, but that they did so with seienter. The ALJ said, “I reject respondents’ position that seienter or bad faith conduct is required for the Commission to act under Rule 2(e)(ii).... Violations by accountants of GAAP and GAAS constitute unethical and improper professional conduct.” Thus, having adopted the proposition that transgressions of GAAP and GAAS are, without more, a violation of 2(e) (in other words, negligence alone suffices), the ALJ had no need to consider the analytical terrain between the mental states of negligence and bad faith. Of course, it is blacldetter administrative law that the Commission may find facts based on its own review of the record. Unlike a court of appeals reviewing a lower court decision, the Commission may undertake an independent review of the record in considering the ALJ’s initial decision — and indeed did so in this case. Subject to certain parameters, see Universal Camera Corp. v. NLRB, 340 U.S. 474, 492, 496-97, 71 S.Ct. 456, 466, 468-69, 95 L.Ed. 456 (1951), the Commission may modify the factfinder’s conclusions with adequate explanations therefor. .Since the Commission (not the ALJ) is charged with the responsibility to suspend petitioners, the initial decision of the ALJ is of limited consequence. In Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 105 S.Ct. 2265, 85 L.Ed.2d 652 (1985), the Supreme Court rejected a similar due process challenge where the defendant, a lawyer suspended from practice for deceptive advertising, argued that new allegations could not be raised after the initial proceedings: “That the Board of Commissioners chose to make its recommendation of discipline on the basis of reasoning different from that of the Office of Disciplinary Counsel is of little moment: what is important is that the Board’s recommendations put appellant on notice of the charges he had to answer to the satisfaction of the Supreme Court of Ohio.” Zauderer, 471 U.S. at 654, 105 S.Ct. at 2283. Here, not only did petitioners have notice of the charge of improper professional conduct, they actually and vigorously litigated the specific question of mental culpability at every stage of the proceedings. See id. at 654-55,105 S.Ct. at 2283-84. And the Court distinguished Ruffalo as a special instance of a prosecutorial “trap”: “the very evidence put on by the petitioner in defense of the original charges became, under the revised charges, inculpa-tory.” Id. at 655 n. 18, 105 S.Ct. at 2284 n. 18. There are no allegations of such bait- and-switch tactics here, and therefore the Commission appears to me to be — procedurally at least — free to determine that petitioners were reckless. The problem, as I have pointed out, is that the Commission did not clearly make such a determination (but merely “noted” it) and failed to set forth the facts upon which such a determination is based so that we could review their construction of Rule 2(e)(l)(ii) in light of these facts. Of course, were the Commission to decide on remand clearly to rest a holding (whatever it were to say about negligence) on petitioners’ recklessness, petitioners could still challenge that basis for concluding they engaged in improper conduct, both legally and on the evidence. In sum, petitioners’ mental state was very much at issue in this case — certainly after petitioners themselves made it so. I rather doubt that the mental state with which they carried out the acts alleged to be misconduct could ever be thought to be, as Judge Randolph puts it, a “new charge.” But surely petitioners cannot possibly claim that they were not on notice that their mental state was relevant to the case when they themselves sought to make it so. Nor can it be seriously argued that having claimed that the SEC was obliged to prove scienter or bad faith, as opposed to mere negligence, petitioners were somehow surprised by the Commission’s determination that their conduct amounted to recklessness — a characterization that lies between negligence and bad faith. The Commission has variously indicated that different levels of mental culpability are needed to make out a 2(e)(l)(ii) violation by professionals (lawyers or auditors): simple negligence as the Commission privately held in Schulzetenberg; gross negligence implied by the “so deficient” language of Haskins & Sells; recklessness hinted by the Commission in its opinion below; or willfulness or bad faith suggested by Logan and Carter. I think the Commission must choose its standard and forthrightly apply it to this case. Given the enormous impact on accountants— and lawyers — that the Rule has, and in fairness to petitioners, the Commission must be precise in declaring the standard against which petitioners’ conduct is measured and exactly why that conduct violated the standard. Nor should we be asked to determine whether the Commission had the authority to define what constitutes improper professional conduct and whether it correctly decided that petitioners had engaged in such improper conduct — without the benefit of knowing precisely what the Commission thinks is improper. y. Absent such clarity, the proper course, one that we follow today, is to remand so as to afford the agency an opportunity to set forth its view in a manner that would permit reasoned judicial review. Judge Randolph would go one step further and vacate the order, a position which rests on the following syllogism: An agency that fails to explain adequately its actions necessarily has violated the Administrative Procedure Act and has therefore engaged in unlawful (arbitrary and capricious) activity. Randolph Op. at 490. All arbitrary and capricious activity must be “set aside” — which means the SEC’s order must be “vacated.” Id. at 491. Therefore, Judge Randolph concludes, an agency’s failure to explain its actions adequately enough to provide judicial review must always be vacated. Id. at 493. That is so even when the reviewing court is unsure of the agency’s reasoning. This assertion, if accepted, would fundamentally alter the role of the judiciary vis-a-vis administrative agencies by forcing courts to decide that the agency’s action is either unlawful or lawful on the first pass, even when the judges are unsure as to the answer because they are not confident that they have discerned the agency’s full rationale. This assertion finds support in neither logic nor precedent; as far as I can determine, it is an argument that has never been presented by any party in any case — save one, see infra at 464-65 n. 13. Judge Randolph’s premise is that the APA requires an agency to explain adequately the basis for every decision, and the failure to do so renders the agency action “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A) (1988). The APA, of course, requires that every agency action include a statement of its “findings and conclusions, and the reasons or basis therefore.” 5 U.S.C. § 557(c)(3)(A) (1988). That means that if an agency refused to give any reasons for its action a court would have no alternative but to conclude that the agency acted unlawfully. It does not mean, however, that every time a reviewing court wishes further elaboration from an agency, the court perforce has concluded that the agency acted unlawfully. An inadequate statement is, nevertheless, a statement of findings and conclusions, and therefore the agency, by including such a statement, has not necessarily violated Section 557 so as to make its action unlawful under Section 706. Since “courts cannot exercise their duty of review unless they are advised of the considerations underlying the action under review,” SEC v. Chenery Corp., 318 U.S. 80, 94, 63 S.Ct. 454, 462, 87 L.Ed. 626 (1943) (Chenery I), reviewing courts will often and quite properly pause before exercising full judicial review and remand to the agency for a more complete explanation of a troubling aspect of the agency’s decision. See, e.g., Sullivan Indus. v. NLRB, 957 F.2d 890, 905 n. 12 (D.C.Cir.1992) (“Until the Board explains itself, we have no way of reviewing the Board’s actions for consistency or rationality and no way of keeping our own precedents in harmony.”); United States Dep’t of Defense v. FLRA 982 F.2d 577, 580 (D.C.Cir.1993) (“Because the record and the FLRA’s explanation for its decision are insufficient to support judicial review, the case is remanded to FLRA.”) (internal quotations and citation omitted); Radio Station KFH Co. v. FCC, 247 F.2d 570, 572 (D.C.Cir.1957). The principle has been extended to certain situations where the court is not certain whether an agency has neglected a relevant factor in its decision, see Southwestern Public Serv. Co. v. FERC, 952 F.2d 555, 563 (1992); Charlottesville v. FERC, 661 F.2d 945, 954 (D.C.Cir.1981); City Fed. Savings & Loan Ass’n v. FHLBB, 600 F.2d 681, 689 (7th Cir.1979); City Nat’l Bank v. Smith, 513 F.2d 479 (D.C.Cir.1975), or failed to explain a departure from precedent. See Philadelphia Gas Works v. FERC, 989 F.2d 1246, 1247 (D.C.Cir.1993); Pittsburgh Press Co. v. NLRB, 977 F.2d 652, 658, 662 (D.C.Cir.1992). In many of these cases, we make clear that in remanding, we have not found the agency action to be arbitrary and capricious. See, e.g., Philadelphia Gas Works v. FERC, 989 F.2d 1246, 1251 (D.C.Cir.1993); Sullivan Indus. v. NLRB, 957 F.2d 890, 905 n. 12 (D.C.Cir.1992). In Tex Tin Corp. v. EPA 935 F.2d 1321 (D.C.Cir.1991) {Tex Tin I), for example, we refused EPA counsel’s invitation that we affirm, based on “common sense,” the agency’s decision to place a hazardous waste facility on the National Priorities List (NPL) under CERCLA: Common sense cannot answer that question; petitioner is entitled to a decision based on the expertise of the agency. Where the agency has failed to exercise its expertise or to explain the path that it has taken, we have no choice but to remand for a reasoned explanation for the conclusion. ... Id. at 1324. After the EPA wrote an explanation on remand, the facility again petitioned for review. On the second go-round, Tex Tin Corp. v. EPA 992 F.2d 353 (D.C.Cir.1993) (Tex Tin II), Judge Randolph, writing for the court, admonished another panel of the court for having “inaccurately cited Tex Tin 7 as a case involving the vacating of an NPL listing decision,” id. at 354 n. 1, and thus recognized the distinction between remanding for fuller explanation and deciding agency action to be unlawful. After concluding that the EPA had failed to comply with the remand order, the court then declared the action to be arbitrary and capricious and ordered the facility to be del-isted. See id. at 356. This is but one of many instances where we have remanded to an agency for a better explanation before finally deciding that the agency’s action was arbitrary and capricious. Compare Bechtel v. FCC, 10 F.3d 875, 887 (D.C.Cir.1993) with Bechtel v. FCC, 957 F.2d 873, 882 (D.C.Cir.), cert. denied sub nom. Galaxy Communications Inc. v. FCC, — U.S.-, 113 S.Ct. 57, 121 L.Ed.2d 26 (1992); United States Office of Personnel Management v. FLRA 905 F.2d 430, 434 (D.C.Cir.1990) with American Fed’n of Gov’t Employees v. FLRA 853 F.2d 986, 993 (D.C.Cir.1988); Greyhound Corp. v. ICC, 668 F.2d 1354, 1364 (D.C.Cir.1981) with Greyhound Corp. v. ICC, 551 F.2d 414, 418 (D.C.Cir.1977). To be sure, there are cases where an agency’s failure to state its reasoning or to adopt an intelligible decisional standard is so glaring that we can declare with confidence that the agency action was arbitrary and capricious. See, e.g., Airmark Corp. v. FAA 758 F.2d 685, 695 (D.C.Cir.1985) (“[T]he FAA has utterly failed to provide a consistent approach that would allow even a guess as to what the decisional criteria would be.”). And an agency’s failure to distinguish applicable precedents or to explain its decision could be violative of the APA. American Fed’n of Gov’t Employees v. FLRA, 774 F.2d 498, 504-05 (D.C.Cir.1985). In practice, the distinction — between a case where the reviewing court determines that the agency’s explanation for its action is so crippled as to be unlawful and one where the court, unsure of the agency’s reasoning, remands for a fuller explanation without expressing a view as to whether the agency’s action is unlawful — is a matter of degree. But doctrinally the difference is enormous; in the latter course, which I think describes this case and which we follow today, the court has withheld full judicial review and therefore has not yet determined whether the agency action is arbitrary and capricious. The Supreme Court itself has recognized that a reviewing court may proceed cautiously by remanding for fuller explanation before deciding whether the agency’s action violated administrative law: Where the statement inadequately discloses his reasons, the Secretary may be afforded opportunity to supplement his statement.... The district court may, however, ultimately come to the conclusion that the Secretary’s statement of reasons on its face renders necessary the conclusion that his decision not to sue is so irrational as to constitute the decision arbitrary and capricious. Dunlop v. Bachowski 421 U.S. 560, 574-75, 95 S.Ct. 1851, 1861-62, 44 L.Ed.2d 377 (1975) (citations omitted) overruled in not relevant part by Furniture & Piano Moving, Furniture Store Drivers, Helpers, Warehousemen & Packers v. Crowley, 467 U.S. 526, 549-50 n. 22, 104 S.Ct. 2557, 2570, n. 22, 81 L.Ed.2d 457 (1984). Pension Benefit Guaranty Corp. v. LTV Corp., 496 U.S. 633, 110 S.Ct. 2668, 110 L.Ed.2d 579 (1990), on which Judge Randolph relies, does not hold otherwise; it actually lends further support to the foregoing analysis. The Court there reconciled the ostensible conflict between Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978), which prohibited courts from imposing procedural requirements other than those found in the APA, and Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971), which held that an agency’s post hoc rationalization does not provide an adequate basis for judicial review under the APA, by stating: At most, Overton Park suggests that § 706(2)(A), which directs a court to ensure that an agency action is not arbitrary and capricious or otherwise contrary to law, imposes a general “procedural” requirement of sorts by mandating that an agency take whatever steps it needs to provide an explanation that will enable the court to evaluate the agency’s rationale at the time of decision. Pension Benefit, 496 U.S. at 654, 110 S.Ct. at 2680. This statement does not, as Judge Randolph implies, mean that the agency’s failure to provide a satisfactory explanation is per se arbitrary and capricious, but that in order for the court to fulfill its duties under section 706, the agency must explain adequately its actions. Until the agency does so, the court cannot determine whether the action is arbitrary and capricious, and, indeed, for the court to so declare before it can discern the agency’s rationale is a violation of Vermont Yankee. See Pension Benefit, 496 U.S. at 655, 110 S.Ct. at 2680. Judge Randolph would distinguish cases where we have remanded for further explanation without vacating the agency action on grounds that they did not specifically address the mandate of section 706(2)(A) and therefore are “inconsequential for prece-dential purposes.” But the cases do not cite or discuss section 706(2)(A) because we had not found the agency action to be arbitrary and capricious; we were simply unsure and therefore asked the agency for clarification of its position and the rationale therefor. See, e.g., Philadelphia Gas Works v. FERC, 989 F.2d 1246, 1251 (D.C.Cir.1998). Instead of providing a basis for distinction, Judge Randolph’s analysis is circular; it assumes the validity of the premise for his position. As I have shown, that premise is flawed, and therefore Judge Randolph’s syllogism is a fortiori invalid. But it is worth noting that Judge Randolph’s minor proposition — that all agency actions determined to be arbitrary and capricious must be set aside — is also dubious, in light of circuit precedent. Even after condemning an agency action as arbitrary and capricious, we have recognized our remedial discretion not to vacate the agency decision: In fashioning a remedy for an agency’s failure to present an adequate statement of basis and purpose, this court may either remand for specific procedures to cure the deficiency without vacating rule, see, e.g., National Nutritional Foods Ass’n v. Weinberger, 512 F.2d 688, 701, 703-04 (2d Cir.), cert. denied, 423 U.S. 827 [96 S.Ct. 44, 46 L.Ed.2d 44] (1975), or it may vacate the rule, thus requiring the agency to initiate another rulemaking proceeding if it would seek to confront the problem anew. See, e.g., Tabor v. Joint Bd. for Enrollment of Actuaries, 566 F.2d 705, 710-12 (D.C.Cir.1977). Independent U.S. Tanker Owners Comm. v. Dole, 809 F.2d 847, 854-55 (D.C.Cir.), cert. denied sub nom. Atlantic Richfield Co. v. Independent U.S. Tanker Owners Comm., 484 U.S. 819, 108 S.Ct. 76, 98 L.Ed.2d 39 (1987). This language, which Judge Randolph dismisses as a ease that had “gone astray”, was quoted approvingly in United Mine Workers, Int’l Union v. Dole, 870 F.2d 662, 673 (D.C.Cir.1989). See also Brookings Mun. Tel. Co. v. FCC, 822 F.2d 1153, 1171-72 (D.C.Cir.1987). Tellingly, the bulk of Judge Randolph’s discussion (and virtually all of the eases on which he relies) is directed to this minor proposition which I need not even reach because, as I have noted, I think his premise — that whenever an agency provides a reviewing court with an inadequate explanation of its decision, the agency necessarily has acted unlawfully — is quite wrong. As a practical matter, vacating the order in this case would stay petitioners’ suspension until the Commission reissues an improved opinion. Judge Randolph suggests that if the Commission wishes to leave the suspensions in place pending remand, it should apply for a stay of this court’s mandate. Petitioners, however, had the opportunity to request a stay of their suspension pending appeal (and therefore pending our remand order) by application either to the Commission or to this court for a stay. See 15 U.S.C. § 78y(c)(2). Since petitioners made no such application and, in any event, “there was no reasonable ground for failure to apply to the Commission,” id., I see no reason for us to even consider providing the relief that they did not seek. * * * * * sH This is doubtless an important case regarding the SEC’s authority to regulate the conduct of professionals practicing before the Commission. (In my view it also implicates substantial issues of judicial review of administrative agencies — largely because of Judge Randolph’s challenge to long-standing practices of our court.) I think the Commission should state clearly and without equivocation its decisional standard with respect to “improper professional conduct” under Rule 2(e)(l)(ii) and how petitioners’ conduct violates that standard. Doing so, of course, would force the Commission to face squarely and forthrightly the legal and practical consequences of its decision. The Commission’s task on remand, and the considerations it must address, I think are readily discernible from a careful reading of my and Judge Randolph’s opinions, as well as Judge Reynolds’ dissent. APPENDIX D.C. Circuit cases remanding for inadequate explanation without vacating the agency action. 1991-1993 1. Western Resources, Inc. v. FERC, 9 F.3d 1568, 1580 (D.C.Cir.1993). 2. Timpinaro v. SEC, 2 F.3d 453, 460 (D.C.Cir.1993). 3. Edison Elec. Inst. v. ERA, 2 F.3d 438, 447 (D.C.Cir.1993). 4. Laclede Gas Co. v. FERC, 997 F.2d 936, 948 (D.C.Cir.1993). 5. Mesa v. FERC, 993 F.2d 888, 898 (D.C.Cir.1993). 6. Philadelphia Gas Works v. FERC, 989 F.2d 1246, 1250-57 (D.C.Cir.1993). 7. Ethyl Corp. v. Browner, 989 F.2d 522, 524 (D.C.Cir.1993). 8. Somerset Welding & Steel, Inc. v. NLRB, 987 F.2d 777, 782 (D.C.Cir.1993). 9. U.S. Dept. of Defense v. FLRA, 982 F.2d 577, 580 (D.C.Cir.1993). 10. Pittsburgh Press Co. v. NLRB, 977 F.2d 652, 662 (D.C.Cir.1992). 11. New York v. Reilly, 969 F.2d 1147, 1153 (D.C.Cir.1992). 12. Pension Benefit Guaranty Corp. v. FLRA, 967 F.2d 658, 668-69 (D.C.Cir.1992). 13. Leeco, Inc. v. Hays, 965 F.2d 1081, 1085 (D.C.Cir.1992). 14. NLRB v. McClatchy Newspapers, Inc., 964 F.2d 1153, 1154 (D.C.Cir.1992). 15. George Hyman Constr. Co. v. Brooks, 963 F.2d 1532, 1540-1 (D.C.Cir.1992). 16. United States Information Agency v. FLRA, 960 F.2d 165, 171 (D.C.Cir.1992). 17. Sullivan Indus. v. NLRB, 957 F.2d 890, 905 (D.C.Cir.1992). 18. Williams Enter., Inc. v. NLRB, 956 F.2d 1226, 1240 (D.C.Cir.1992). 19. City of Holyoke Gas & Elec. Dep’t v. FERC, 954 F.2d 740, 743 (D.C.Cir.1992). 20. Southwestern Pub. Serv. Co. v. FERC, 952 F.2d 555, 563 (D.C.Cir.1992). 21. District Lodge 61, International Ass’n of Machinists and Aerospace Workers v. NLRB, 949 F.2d 441, 450 (D.C.Cir.1991). 22. Southwest Merchandising Corp. v. NLRB, 943 F.2d 1354, 1361 (D.C.Cir.1991). 23. Oklahoma Natural Gas Co. v. FERC, 940 F.2d 699, 704 (D.C.Cir.1991). 24. Consumers Union of the U.S., Inc. v. Federal Reserve Bd., 938 F.2d 266, 274 (D.C.Cir.1991). 25. Tex Tin Corp. v. EPA, 935 F.2d 1321, 1324 (D.C.Cir.1991). 26. Alliance for Cannabis Therapeutics v. DEA 930 F.2d 936, 940-1 (D.C.Cir.1991). 27. Tennessee Gas Pipeline Co. v. FERC, 926 F.2d 1206, 1213 (D.C.Cir.1991). 28. Bangor Hydro-Electric Co. v. FERC, 925 F.2d 465, 468 (D.C.Cir.1991). 29. International Union, United Mine Workers of Am. v. Federal Mine Safety and Health Admin., 924 F.2d 340, 346 (D.C.Cir.1991). RANDOLPH, Circuit Judge: David J. Checkosky and Norman A. Aid-rich, both of whom are certified public accountants, petition for judicial review of the Securities and Exchange Commission’s order suspending them from practicing before the Commission for two years. The ease is complex. The record consists of nearly 4,000 transcript pages and hundreds of exhibits relating to five audits petitioners conducted and the governing accounting principles and standards. Petitioners raise serious issues concerning, among other subjects, the sufficiency of the evidence, the Commission’s interpretation of accounting principles, the Commission’s authority to regulate their conduct, and the standard of care by which the Commission judged their conduct. Also before the court is the district court’s judgment — which we affirm for the reasons given in Part V of this opinion — refusing to grant Checkosky and Aldrich leave to depose members of the Commission and others pursuant to Rule 27 of the Federal Rules of Civil Procedure. Checkosky and Aldrich sought the same relief when they attempted — unsuccessfully, we decide — to file a mandamus petition in this court. We also sustain the Commission’s rejection of petitioners’ motion for discovery regarding alleged procedural irregularities in the Commission’s handling of their case. The Commission issued its order suspending Checkosky and Aldrich pursuant to Rule 2(e)(l)(ii) of its Rules of Practice, 17 C.F.R. § 201.2(e)(1)(h), after finding that they had not followed generally accepted auditing standards in examining and certifying financial statements filed with the agency. I conclude that the Commission had authority to promulgate Rule 2(e). Judge Sil-berman comments that my analysis “seems to conflate” the Commission’s enforcement authority with its authority to discipline professionals. Silberman op. at 456 n. 3. The reader will learn otherwise in Part II of this opinion. My point is that the Commission’s authority under Rule 2(e) must rest on and be derived from the statutes it administers. As Judge Reynolds and I agree, the Commission held that it may sanction auditors for negligent conduct under Rule 2(e)(1)(h). All of us agree that substantial evidence supported the Commission’s findings. I do not believe, however, that the Commission adequately explained why the legal principles it announced earlier in a Rule 2(e) prosecution of attorneys should not preclude it from suspending auditors for negligent conduct. Because the Commission acted arbitrarily and capriciously, the law requires the court to vacate the Commission’s order suspending Checkosky and Aldrich for two years, beginning August 1992. I therefore dissent from the judgment, which merely remands the case, a result representing our least common denominator. Remanding without vacating, as Judge Silberman advocates, not only violates the Administrative Procedure Act but also forces petitioners to serve out their suspensions while the Commission ponders its unlawful order. The balance of this opinion is organized as follows: Introduction Coopers & Lybrand, a national accounting firm, served as the independent auditor for Savin Corporation, a Delaware corporation with headquarters in Connecticut. Savin registered its securities under section 12(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78i(b), and filed periodic reports with the Commission, including its audited financial statements. See 15 U.S.C. § 78m(a); 17 C.F.R. § 249.310 (form 10-K); see generally SEC Reg.,S-X, 17 C.F.R. pt. 210 (containing the requirements for the financial statements). Savin’s stock was trad-éd on the New York Stock Exchange and the Pacific Stock Exchange. Checkosky and Aldrich worked in Coopers & Lybrand’s Stamford, Connecticut office. They were, respectively, the engagement partner and audit manager on the audits of Savin’s financial statements for the fiscal years (May 1 to April 30) 1981 through 1984. After Aldrich became a partner in the fall of 1984, he served as a second, or concurring, partner on the Savin 1984 calendar year audit (eight months ended December 31, 1984). On behalf of Coopers & Lybrand, Checkosky and Aldrich issued the accountant’s reports, stating that their examinations were made in accordance with generally accepted auditing standards (GAAS), and that Savin’s financial statements fairly presented the required information in conformity with generally accepted accounting principles (GAAP). For each of the years in question, Savin filed its financial statements and the accountants’ reports with the Commission. When Checkosky and Aldrich certified Sa-vin’s financial statements, they were “practicing before” the Commission. “Practice” includes “the preparation of any statement, opinion or other paper by any attorney, accountant, engineer or other expert, filed with the Commission” in any report. 17 C.F.R. § 201.2(g)(2). In 1987, the Commission, at the urging of its Office of Chief Accountant, initiated a private proceeding to determine whether Checkosky and Aldrich had engaged in “improper professional conduct,” in violation of Rule 2(e)(l)(ii) in connection with Savin’s financial statements for the five accounting periods. Rule 2(e)(1), 17 C.F.R. § 201.2(e)(1), reads: person who is found by the Commission after notice of and opportunity for hearing in the matter (i) not to possess the requisite qualifications to represent others, or (ii) to be lacking in character or integrity or to have engaged in unethical or improper professional conduct, or (iii) to have willfully violated, or willfully aided and abetted the violation of any provision of the Federal securities laws (15 U.S.C. 77a to 80b-20), or the rules and regulations thereunder. The Commission may deny, temporarily or permanently, the privilege of appearing or practicing before it in any way to any II The Commission’s Authority TO PRESCRIBE RULE 2(e) Before giving further details about the case against Checkosky and Aldrich, I will address their claim that Rule 2(e) is invalid. Most of Rule 2(e), including the portion used against these petitioners (the second clause of Rule 2(e)(l)(ii)), has been in effect for more than half a century. Two courts of appeals have passed on the rule’s validity, both in cases involving disciplinary actions against auditors. Touche Ross & Co. v. SEC, 609 F.2d 570, 577-82 (2d Cir.1979), generally sustained the rule, as did Davy v. SEC, 792 F.2d 1418, 1421-22 (9th Cir.1986), which relied on Touche, although in Davy the court reserved decision on what standards of care the Commission validly could impose on accountants. 792 F.2d at 1422. Neither the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a-78ll, nor the Securities Act of 1933, 15 U.S.C. §§ 77a-77aa, expressly authorizes the Commission to discipline accountants who “practice” before the agency. The only analogous authority, contained in the 1934 Act, relates to securities brokers and dealers who are subject to suspension or revocation if the Commission finds that they have been convicted of certain crimes or that they have “willfully” committed specified securities violations. See 15 U.S.C. §§ 78o (b)(4), 78o-3(h), 78o-(e), 780-5(e); see also Steadman v. SEC, 450 U.S. 91, 101 S.Ct. 999, 67 L.Ed.2d 69 (1981), regarding disciplinary proceedings under other statutes the Commission administers. Given this void, the Commission locates its authority for Rule 2(e) in its general rulemaking power pursuant to section 23(a)(1) of the 1934 Act (15 U.S.C. § 78w(a)(1)), and pursuant to a nearly identical section in the 1933 Act (15 U.S.C. § 77s(a)). Section 23(a)(1) states: The Commission ... shall ... have power to mate such rules and regulations as may be necessary or appropriate to implement the provisions [of the 1934 Act] for which [it is] responsible or for the execution of the functions vested in [it] by this chapter.... “Necessary or appropriate,” like “necessary and proper,” is potentially open-ended language, as Chief Justice Marshall demonstrated in McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 4 L.Ed. 579 (1819). But no one would suppose that the Commission’s rule-making power is the power to prescribe whatever the agency sees fit. There are limits, derived from the substantive provisions of the statute. Section 10(b) of the 1934 Act, for instance, contains similar rule-making language: it makes it “unlawful for any person ... (b) [t]o use or employ, in connection with the purchase or sale of any security ... any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.” 15 U.S.C. § 78j(b) (italics added). Ernst & Ernst v. Hochfelder, 425 U.S. 185, 215, 96 S.Ct. 1375, 1391, 47 L.Ed.2d 668 (1976), held that because section 10(b) lability is framed in terms of intentional misconduct, a Commission rule could not predicate recovery on negligence, even though dispensing'with scienter might advance the statutory objective of protecting investors. “The rule-making power granted to an administrative agency,” the Court added, “is not the power to make law.” 425 U.S. at 213, 96 S.Ct. at 1391. It is instead “the power to adopt regulations to carry into effect the will of Congress as expressed by the statute.” Manhattan Gen. Equip. Co. v. Comm’r, 297 U.S. 129, 134, 56 S.Ct. 397, 400, 80 L.Ed. 528 (1936). The case before us differs from Ernst & Ernst in the respect that Rule 2(e) does not alter any statutory basis for suspending accountants from practicing before the Commission; there is none. That difference, petitioners say, cuts in their favor. Put in terms of the Commission’s rulemaking statute, their point is that a Commission regulation cannot be viewed as “necessary or appropriate” to implement a statutory provision when there is no provision to implement. As against this the Commission invokes Mourning v. Family Publications Service, Inc., 411 U.S. 356, 369, 93 S.Ct. 1652, 1660, 36 L.Ed.2d 318 (1973), a decision sustaining a Federal Reserve Board rule on the ground that it was “ ‘reasonably related to the purposes of the enabling legislation.’ ” Thorpe v. Housing Authority of the City of Durham, 393 U.S. 268, 280-81, 89 S.Ct. 518, 525, 21 L.Ed.2d 474 (1969). The Federal Reserve Board derived its power from a statute authorizing rules “necessary or proper to effectuate the purposes ” of the legislation. The Commission’s rulemaking authority is worded differently. It extends only to regulations implementing statutory “provisions,” which might be considered more confining. See Rodriguez v. United States, 480 U.S. 522, 525-26, 107 S.Ct. 1391, 1393, 94 L.Ed.2d 533 (1987) (per curiam). A distinction along these lines would lend support to petitioners, but we are not free to draw it. Like section 23(a)(1) of the 1934 Act, the rulemaking section in Thorpe, 393 U.S. at 280-81, 89 S.Ct. at 525-26 also authorized rules and regulations necessary to carry out statutory “provisions,” rather than purposes. Yet Mourning treated the two formulations as equivalent (411 U.S. at 369-70, 93 S.Ct. at 1660-61), and construed both to permit agencies to prescribe remedial measures “reasonably related” to statutory purposes. See also Ameri can Trucking Ass’ns v. United States, 344 U.S. 298, 73 S.Ct. 307, 97 L.Ed. 337 (1953), which the Court cited in conjunction with Thorpe. I therefore agree with the Commission, and with the Second Circuit in Touche, 609 F.2d at 579, that we are bound to apply Mourning’s test and thus must examine Rule 2(e)’s relationship to “the purposes of the enabling legislation.” Protecting those who rely on financial statements filed with the Commission and promoting accuracy in reporting are doubtless objectives of both the 1933 and 1934 Acts. See Touche, 609 F.2d at 580-81. But to ask simply whether Rule 2(e) is reasonably related to such sweeping objectives is to put the matter too generally. “[T]he purpose of a statute,” the Supreme Court has reminded us, “includes not only what it sets out to change, but also what it resolves to leave alone.” West Virginia Univ. Hosps., Inc. v. Casey, 499 U.S. 83, 98, 111 S.Ct. 1138, 1147, 113 L.Ed.2d 68 (1991). In this regard, petitioners say that one subject Congress decided to leave alone was disciplinary actions against members of the accounting profession. Brief for Petitioners at 25, citing, inter alia, Robert A. Downing & Ric