Washington, Apr 04: When the US Securities and Exchange Commission launches a formal investigation, it increasingly expects the targeted company to swiftly dismiss executives suspected of wrongdoing, securities lawyers say. "There is that expectation now" as a sign of good faith and a willingness to cooperate, said Jacob Frenkel, a partner at the law firm of Smith Gambrell & Russell in Washington and a former SEC official and federal prosecutor.
"It's not an affirmative expectation," he added, but the SEC would view "a decision not to demand the resignation of an official as a failure to take corrective measures quickly."

In the case of Royal Dutch/Shell , for instance, more dismissals may follow those of Chairman Phil Watts and oil and gas division chief Walter van de Vijver, said Lynn Turner, former SEC chief accountant. Watts and van de Vijver were fired by Shell on March 3, 13 days after the world's third-largest oil group said it was cooperating with a formal SEC probe of reserve accounting.
"I wouldn't be surprised to see more go" at Shell, said Turner, now a professor at Colorado State University .