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...
The Securities and Exchange Commission ratified the appointment of its five agency administrative law judges Nov. 30 in an effort to head off a challenge to the constitutionality of its hearing process.
“By ratifying the appointment of its ALJs, the Commission has resolved any concerns that administrative proceedings presided over by its ALJs violate the Appointments Clause,” the Securities and Exchange Commission said in a statement. It also directed its ALJs to review their actions in open administrative proceedings.
A day earlier, in an abrupt about-face, the administration told the U.S. Supreme Court it would no longer defend a decision by the U.S. Court of Appeals for the District of Columbia Circuit upholding the SEC’s use of in-house judges.
The case is one of many contending that the way the agency’s law judges were appointed isn’t constitutional. In the case, investment adviser Raymond J. Lucia, who was barred from the industry for allegedly misleading prospective clients, claimed unsuccessfully that the proceedings against him were flawed because the SEC’s in-house judges were hired unconstitutionally.
SEC ALJs are constitutional “officers” who must be appointed pursuant to the Appointments Clause—that is, by the president, a federal judge or the head of the agency— Lucia said.
After the D.C. Circuit disagreed, Lucia asked the Supreme Court to take up the case. In a Nov. 29 brief, U.S. Solicitor General Noel Francisco told the justices that SEC ALJs are, in fact, “officers” subject to Appointments Clause restrictions.
“We have maintained all along that the SEC’s ALJs are Officers of the United States because they exercise significant authority under federal law,” Lucia’s lawyer Mark Perry told Bloomberg Law. “The contrary judgment of the D.C. Circuit should be reviewed and reversed by the Supreme Court—as both Mr. Lucia and the United States request,” Perry, a member of Gibson Dunn & Crutcher LLP, Washington, said.
The SEC ratified the appointments of Chief Administrative Law Judge Brenda Murray and ALJs Carol Fox Foelak, Cameron Elliot, James E. Grimes, and Jason S. Patil.
To contact the reporter on this story: Phyllis Diamond in Washington at email@example.com
To contact the editor responsible for this story: Seth Stern at firstname.lastname@example.org
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 email@example.com.
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 firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)