Welcome to SEC Roundup, a bimonthly video sequence by former Securities and Trade Fee senior trial counsels Nick Morgan and Tom Zaccaro, founders of the nonprofit advocacy group Investor Alternative Advocates Community.
A extremely uncommon SEC administrative continuing presided over by an administrative regulation choose has emerged. Simply the truth that an ALJ is actively presiding over a contested continuing is information, approaching the one-year anniversary of SEC v. Jarkesy, the Supreme Courtroom choice that appeared to spell the top of ALJs.
However current developments on this case are unprecedented for one more motive: the Enforcement Division filed a federal courtroom motion to implement a subpoena issued within the administrative continuing with out first acquiring the required permission from the fee. When protection counsel referred to as foul, the division rapidly backpedaled and withdrew the federal courtroom motion. On the identical time, the division despatched emails in regards to the case to an legal professional in SEC Chairman Paul Atkins’ workplace, the identical sort of severe breach that precipitated the SEC to dismiss 42 pending administrative proceedings final yr.
Regardless of a brand new chair, and regardless of three Supreme Courtroom opinions trimming administrative proceedings (Lucia, Cochran and Jarkesy), SEC administrative proceedings are persevering with with the identical flaws and an Enforcement Division apparently emboldened to behave with out SEC authorization.
Two former senior SEC attorneys, Sarah Heaton Concannon of Quinn Emanuel and Russ Ryan of the New Civil Liberties Alliance, focus on the problem.