Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
An influential federal appeals court will reconsider a challenge to the SEC’s in-house courts on May 24 ( Raymond J. Lucia Cos., Inc. v. SEC , D.C. Cir., No. 15-1345, 2/16/17 ).
The U.S. Court of Appeals for the District of Columbia Circuit has scheduled en banc arguments in the case brought by investment adviser Raymond J. Lucia challenging the SEC’s administrative law judges.
In August 2016, a panel of three judges on the U.S. Court of Appeals for the District of Columbia Circuit concluded the administrative forum is constitutional.
The ruling by the appeals court was a victory for the SEC, which has faced related challenges in other federal courts. The controversy over the SEC’s practice of bringing enforcement actions administratively has been brewing since at least 2010, when the Dodd-Frank Act expanded the agency’s jurisdiction and allowed the agency’s enforcement division to seek monetary penalties from all individuals, not just brokers and investment advisers.
The D.C. Circuit was the first appeals court to address the merits of the controversy but other circuits have since issued conflicting rulings, prompting a petition for U.S. Supreme Court review. Thus far, the Second Circuit has ruled that the district courts don’t have jurisdiction over the constitutional question, but the Tenth Circuit held otherwise.
Lucia first sued the SEC as part of an appeal from an in-house judge’s 2013 decision barring him from the industry for misrepresenting the results of his “Buckets of Money” investment strategy.
He and other challengers contend that the SEC’s administrative law judges were hired improperly because neither the president nor the full commission made the appointment, which violates the Appointments Clause.
A panel of the D.C. Circuit rejected that reasoning, holding that ALJ orders aren’t considered final actions of the agency.
Accordingly, the court said, the judges aren’t “officers” who face Appointments Clause restrictions on their employment.
Lucia is represented by Mark A. Perry of Gibson, Dunn & Crutcher LLP, Washington. Perry nor the SEC responded to a request for comment.
To contact the reporter on this story: Antoinette Gartrell in Washington at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)