administrative law judges

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As I noted in a blog post at the time, in June the U.S. Supreme Court entered its opinion in the SEC v. Jerkesy case, striking down the SEC’s use of Administrative Law Judges in civil penalty action. In the following guest post, Gregory Markel, Sarah A. Fedner, and Gershon Akerman of the Seyfarth Shaw law firm take a detailed look at the case and consider its significance and implications. A version of this article previously was published in the Practical Law Forum. I would like to thank the authors for allowing me to publish their article on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.Continue Reading Guest Post: SEC Administrative Proceedings After SEC v. Jarkesy

The United States Supreme Court has held that that, in light of the Seventh Amendment’s right to a jury trial, the SEC must pursue enforcement actions seeking civil penalties in a jury trial proceeding in federal court rather than in an action before an administrative law judge. The Court’s 6-3 ruling could have significant consequences for the many SEC enforcement actions now pending in the agency’s administrative tribunals, as well as for the agency’s pursuit of future enforcement actions. The Court’s ruling could also have important implications for other federal agencies’ use of administrative tribunals as well. A copy of the Court’s June 27, 2024, opinion in SEC v. Jarkesy can be found here.Continue Reading Supreme Court Strikes Down SEC’s Use of Administrative Law Judges in Civil Penalty Actions

On June 30, 2023, the U.S. Supreme Court agreed to take up a case to consider the legality of the SEC’s use of in-house administrative tribunals, which the agency uses to enforce the federal securities laws. The agency sought Supreme Court consideration of a federal appellate court ruling that held the administrative courts to be unconstitutional. The case could significantly impact the way in which the agency enforces the federal securities laws. The court’s June 30, 2023 order in which the SEC’s petition for a writ of certiorari was granted can be found here.Continue Reading U.S. Supreme Court Takes Up Case Concerning the SEC’s Use of In-House Court

On May 18, 2022, the Fifth Circuit held in Jarkesy v. SEC (here), that the agency’s use its in-house Administrative Law Judges, as opposed to its filing of an enforcement action in federal court, is unconstitutional. In the following guest post, Gregory A. Markel, Vincent A. Sama, Daphne Morduchowitz, Giovanna A. Ferrari, and Matthew C. Catalano of the Seyfarth Shaw law firm review the Fifth Circuit’s opinion, and discuss its implications. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
Continue Reading Guest Post: SEC’s In-House Adjudication Deemed Unconstitutional by Fifth Circuit

In a June 21, 2018 decision, the U.S. Supreme Court held that the SEC’s administrative law judges (ALJs) are not merely “employees” but rather are “officers” who must be appointed to their position by the “Heads of Departments” under the Constitution’s Appointments Clause. The Court’s decision at one level represents a rather straightforward application of the Court’s existing case law regarding ALJs. However, the decision raises a number of troublesome issues for the SEC, and leaves a number of other important questions unanswered. The decision also raises a number of questions for other agencies as well.  The ultimate questions in the wake of Lucia v. Securities and Exchange Commission may be whether and to what extent the SEC (and even perhaps other agencies) will continue to use administrative processes to pursue enforcement action. The Court’s opinion in the case can be found here.
Continue Reading Supreme Court’s SEC ALJ Decision Leaves Many Unanswered Questions

sarah good
Sarah A. Good

laura hurtado
Laura C. Hurtado

One of the recurring questions in the securities regulatory enforcement arena has been the question of whether or not the Securities and Exchange Commission’s use of administrative law judges violates the U.S. Constitution. As discussed in the following guest post from Sarah A. Good and Laura C. Hurtado of the Pillsbury law firm, the Tenth Circuit, in direct conflict with a prior decision from the D.C. Circuit, recently held that the SEC’s appointment of administrative law judge’s violates the constitution. The circuit split suggests that this issue may be on its way to the U.S. Supreme Court.

I would like to thank Sarah and Laura for their willingness to allow me to publish their article as a guest post. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Sarah and Laura’s guest post.
Continue Reading Guest Post: Constitutionality of SEC’s ALJs Headed to Supreme Court?


CozenOConnor-Logo-RGBhiscox.logoOne of the controversies in which the SEC recently has found itself involved has been the agency’s use of its own in-house administrative tribunals, where some believe that the agency has an unfair advantage. The increased use of its administrative courts has also drawn court challenges. In the following guest post, Elan Kandel, a Member at the Cozen O’Connor law firm, and Neil Lipuma, Senior Vice President, Underwriting Leader—Financial Services of Hiscox USA take a look at the controversies surrounding the SEC’s use of its administrative tribunals and examines the recent court challenges to the agency’s practices.

 

I would like to thank Elan and Neil for their willingness to publish their guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to readers of this blog. Please contact me directly if you would like to submit a guest post. Here is Elan and Neil’s guest post.

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Earlier this month, the American League won this year’s Major League Baseball All-Star Game. The winner of the annual All-Star Game enjoys home-field advantage for the World Series.  Some have questioned whether there is actually a correlation between “home-field advantage” and winning the World Series. There is nothing to question – there is a distinct advantage. Since 1985, the team with the home-field advantage has won 23 of 29 World Series.[1]

The home field advantage extends beyond Major League Baseball.  The Securities and Exchange Commission (SEC) enjoys a pronounced home-field advantage when trying enforcement actions in its own administrative courts as opposed to federal district courts. According to a recent analysis in The Wall Street Journal, the SEC “[w]on against 90% of defendants before its own judges in contested cases from October 2010 through March of this year.”[2]  For fiscal year 2014, U.S. District Court Judge Jed Rakoff remarked that the SEC had won 100% of the actions tried in its administrative courts, while its success rate in federal court for the same period of time was only 61%.[3]
Continue Reading Guest Post: The Importance of Inferiority as a Basis for Leveling the SEC’s Enforcement Action Playing Field