Former SEC Lawyer Challenges Agency’s Administrative Forum

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By Shira Stein

Denver lawyer David Zisser worked in the SEC’s enforcement division near the start of his 40-year career and his biggest-ever case could be the undoing of the agency’s in-house tribunal.

Zisser convinced the U.S. Court of Appeals for the Tenth Circuit late last year that the way the Securities and Exchange Commission’s administrative law judges are hired doesn’t pass constitutional muster.

Sometime this month, the SEC will decide whether to ask the U.S. Supreme Court to review the Tenth Circuit’s decision, the first by any federal appeals court holding the administrative forum unconstitutional. The justices have already been asked to take up a D.C. Circuit case rejecting a similar constitutional challenge.

Denver securities lawyer Martin Berliner, Berliner McDonald PC, called the Tenth Circuit ruling a “colossal victory,” but Zisser said he considered the matter just “another case” rather than an opportunity to take on the SEC. “I take them on all the time,” he told Bloomberg BNA. However, he said, there’s been a “pretty substantial debate about the fairness of administrative litigation.”

Zisser, a securities litigator at Jones & Keller PC, said he developed an interest in agency litigation as a student at Georgetown University Law Center, which he attended after graduating from Johns Hopkins University. He worked early in his career at the Department of Transportation and the SEC, where he focused on financial fraud involving banks.

Zisser relocated to Denver because “there was a lot of opportunity” and he wanted to serve as a defense lawyer “with primary responsibility for cases and investigations.” He developed a specialty in securities litigation and has argued several securities cases before the Tenth Circuit.

Lawyers in Denver “know of his sophistication and often times will go to him to discuss what might or might not be a viable defense in securities cases,” Gary Lozow, a Denver-based partner at Foster Graham Milstein & Calisher, told Bloomberg BNA. As a rule, Zisser isn’t intimidated by the government, Lozow said. “He’s very ready to do battle for his client.”

Appointments Cause Challenge

In this case, an SEC ALJ held that Zisser’s client, Colorado businessman David Bandimere, acted as an unlicensed broker in connection with a Ponzi scheme. The commission upheld the ALJ’s decision and Bandimere appealed to the Tenth Circuit. He claimed the ALJ wasn’t appointed to his post in a constitutional manner—that is, by the president, a federal judge or the head of the agency.

The Tenth Circuit panel parted ways with the D.C. Circuit and agreed with Bandimere that the appointment of SEC ALJs violated the Constitution’s Appointments Clause.

In early May, the full Tenth Circuit declined to review the panel ruling.

Zisser said he almost certainly will play some role in the proceedings if the justices decide to consider the ruling. The case would be his first to reach the high court, should it get that far.

Zisser, though, didn’t take up Bandimere’s lawsuit for its groundbreaking potential.

Rather, Zisser told Bloomberg BNA, he got involved in the case because “that’s what I do, and that’s what I’ve done for quite a long time.”

To contact the reporter on this story: Shira Stein in Washington at

To contact the editor responsible for this story: Phyllis Diamond at

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