SEC In-House Decisions 50 Percent Below Previous Year Stats

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By Antoinette Gartrell

Securities and Exchange Commission administrative law judges issued eight initial decisions in the first quarter of 2017—half as many as in the first quarter of last year.

The agency’s ability to bring enforcement cases in its in-house court has been under continuing scrutiny, with the federal appeals court divided on whether the forum passes constitutional muster.

Top Issues

As in previous years, material misrepresentations and omissions topped the list of enforcement issues in administrative proceedings during the first quarter of the year. The issue arose in six actions during the period.

Fraudulent schemes and investment advisory fraud were the next-largest categories of violations, each appearing in two of the eight actions.

Conspiracy and custody rule violations also were among the five most-frequently alleged types of misconduct.

Only one initial decision issued during the first quarter has been appealed so far.


Three of the eight initial decisions issued in the first quarter included a disgorgement order, each of them less than $1 million. In 2016, ALJs ordered disgorgement in only 13 out of 49 cases.

Recently, the U.S. Supreme Court agreed to determine whether claims for disgorgement fall under a five-year limitations period that governs SEC penalty actions.

Bloomberg Law tracks all SEC administrative actions filed since the beginning of 2013 except for proceedings against defunct companies that are delinquent in their periodic filings. The data doesn’t include proceedings still within the 21-day period for appeal to the commission. Cases currently on appeal are included even if the commission hasn’t issued a final opinion. The data is updated on a quarterly basis.

To contact the reporter on this story: Antoinette Gartrell in Washington at

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

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