The New York Times had an interesting angle on the decision of the ALJ on Friday to reject disciplinary recommendations of the SEC’s Inspector General (previously discussed here): Is it appropriate for an ALJ employed by the SEC to make the disciplinary decision in cases such as Bear Stearns and Pequot/Aguirre?
Mr. Aguirre told the NY Times that ALJ Brenda Murray “had no business writing the report, because it was outside her jurisdiction as an administrative law judge. The job of writing the report, Mr. Aguirre said, was given to Ms. Murray to create a false impression.” “The S.E.C. has spun this as if Murray was acting as a judge,” Mr. Aguirre said. “She was not.”
The NY Times article added that
Lewis D. Lowenfels, an authority on securities law at Tolins & Lowenfels, said that while he was unfamiliar with the specifics of the Pequot investigation, he objected to any federal agency that merged “the functions of prosecutor, judge, jury and appellate tribunal” under the same roof.
“Many states have an independent corps of administrative law judges who are not employed by any particular regulatory agency,” Mr. Lowenfels said.