The Supreme Court’s unanimous decision on April 14 granting companies and people facing SEC charges the ability to challenge the agency’s constitutional authority in U.S. District Court before the SEC resolves the matter in-house could cause “headaches” for at least some of the SEC’s enforcement efforts, said Christian D. H. Schultz, a Washington-based partner at Arnold & Porter Kaye Scholer LLP and former assistant chief litigation counsel in the SEC’s enforcement division. ”
There will be many cases that the commission may want to bring in an administrative proceeding where the defendant could say, ‘Well I should have this heard by a jury, not some in-house judge,’ which creates a constitutional issue for a federal court to resolve and that jams up the SEC from doing anything in that administrative proceeding,” Mr. Schultz said.
“The whole administrative proceeding process really has the potential to get jammed up significantly.”
Source: Supreme Court decision could see SEC facing logjams in enforcement cases | Pensions & Investments
