On May 24, 2017, the Securities and Exchange Commission (SEC) issued an order staying (1) all administrative proceedings assigned to an ALJ in which a respondent has the option to seek review in the Tenth Circuit of a final SEC order, and (2) all administrative proceedings pending before the SEC on review from an initial decision by an administrative law judge in which a respondent has the option to seek review in the Tenth Circuit. The agency took this action in response to the Tenth Circuit’s opinion in Bandimere v. United States Securities and Exchange Commission and its recent decision denying rehearing en banc. As discussed in greater detail in the Practice Point below, the court in Bandimere held that “the SEC ALJs are inferior officers who must be appointed in conformity with the Appointment Clause.”
This is clearly a hot topic and was discussed at length by the Securities Litigation Committee’s panel held during the Section of the Litigation Annual Conference, entitled Regulatory Enforcement Actions Before Administrative Law Judges: Are They Constitutional? Are They Fair? Be sure to check the committee’s website and LinkedIn page for additional developments.