Securities professionals beware. Following the conclusion of federal court litigation, the SEC may prosecute you a second time for the same conduct in a follow-on administrative proceeding seeking to bar you from your chosen profession. Hear from former SEC enforcement attorney and Assistant U.S. Attorney Keri Axel as she describes the problematic nature of these follow-on APs at a time…
The SEC recently dropped 42 enforcement actions — including many against small investment advisors — as a result of the SEC’s failure to separate the enforcement and judicial functions in its administrative proceedings. *** Concannon and Wolfe explain the significance of the SEC’s breach and how the agency has not fixed the underlying problem: the fact that the “judge” and the “prosecutor”…
Congress should give serious consideration to abolishing SEC administrative proceedings. They are not necessary to an effective securities enforcement program, and they fail to meet the standards of impartiality and fairness we expect from federal institutions. Contrary to some observers’ fears, this would not be the end of the administrative state. It would strengthen confidence in the operations of agencies…
In an order dated May 22, the SEC said it would suspend any cases in which a defendant will have an option to appeal a case before the Tenth Circuit Court of Appeals, which covers the states of Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming. via SEC suspends some in-house court cases over hiring of judges | Reuters
A federal appeals court on Wednesday will consider whether Wall Street’s top cop has vested too much power in its in-house courts, a system that regulators expanded several years ago as they sought to speed enforcement actions against firms and individuals accused of fraud and wrongdoing. The U.S. Court of Appeals for the District of Columbia Circuit will provide the…
Washington lawyer Mark A. Perry is hoping for a better outcome when he returns to the D.C. Circuit tomorrow to argue that the SEC’s administrative forum is inconsistent with the Appointments Clause. The Gibson Dunn & Crutcher LLP appellate litigator will argue the constitutional question on behalf of investment adviser Raymond J. Lucia for the second time as the full…
The U.S. Securities and Exchange Commission on Tuesday suffered a rare loss before one of its own judges, who dismissed a case accusing an Atlanta real estate investor of insider trading. SEC Administrative Law Judge James Grimes found no evidence that Charles Hill gained $744,000 of illegal profit in shares of Radiant Systems Inc in 2011 after learning that the…
Republican lawmakers want to curb the SEC’s authority to bring enforcement actions using in-house tribunals—unless the agency moves first. Parties sued in the administrative forum could move the case to federal court under legislation (H.R. 5983) approved in September by the House Financial Services Committee. via SEC to Face More Pressure on Enforcement Forum Choices | Bloomberg BNA
Although there is intensifying political effort to rein in the SEC’s use of administrative proceedings, the current judicial climate heavily favors the SEC’s continued use of its choice of forum. In addition to the high “win/loss” ratio the SEC has achieved via administrative proceedings, a recent study out of the University of Michigan Law School suggests the shift toward administrative…
Lynn Tilton, the New York financier accused by the U.S. Securities and Exchange Commission of defrauding her investors, on Friday sued the regulator to stop it from pursuing unfair in-house enforcement cases against her and others. The lawsuit filed in Manhattan federal court by Tilton and her firm Patriarch Partners accused the SEC of violating their constitutional rights to due…