Constitutionality of SEC Administrative Proceedings Upheld

May 1, 2015

Ever since the Dodd-Frank Act made the SEC’s choice of forum more permissive, the SEC has been pursuing enforcement actions through administrative proceedings rather than filing charges in federal district court. Targets of these actions have argued that the SEC’s approach deprives them of the discovery and other rights they would have in federal court. In Duka v. SEC, a former S&P official argued that the SEC’s administrative proceedings were unconstitutional because the SEC’s administrative law judges were protected from removal by the President, thus violating the separation of powers. A federal district judge ruled that Duka had failed to show she was likely to win her claim, allowing the SEC’s administrative action to proceed. Read more in Forbes and The New York Times.

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