Over the past two years, the Securities and Exchange Commission’s practice of seeking to adjudicate enforcement actions in its own administrative courts, rather than in federal district courts, has come under increasing scrutiny. Critics have argued that the in-house proceedings, which are heard before an Administrative Law Judge (ALJ) hired by the SEC, are unfairly advantageous to the commission. And the numbers bear this out. When the SEC litigates in its own courts it wins 90 percent of the time, compared to 69 percent in federal court, according to a Wall Street Journal analysis of cases from October 2010 to March 2015.1 This may help explain why the commission chooses to bring the vast majority of cases before ALJs rather than federal district court judges.
Use After Dodd-Frank
The use of administrative courts by the SEC is not new. It has long been the case that the commission could choose to file a civil action in federal district court or to initiate a proceeding in its own administrative courts before an ALJ appointed by the commission. It was only after the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 that this strategy was thrust to the fore.2
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
