Marking a rare loss for the Securities and Exchange Commission (SEC) in its favored administrative forum, SEC Administrative Law Judge (ALJ) James E. Grimes ruled against the agency on April 18, 2017, in In the Matter of Charles L. Hill, Jr.  Ironically, the SEC fought hard to keep the case in the administrative forum, after Respondent Hill filed an action in federal district court claiming the SEC’s “home court” forum was unconstitutional.  The district court enjoined the SEC, but the 11th Circuit vacated the district court’s order, and the case proceeded on the SEC’s administrative court.  There, the ALJ found the SEC’s circumstantial evidence not only to be insufficient, but fatally undermined by the credibility of witnesses who offered testimony favorable to Hill.
Continue Reading SEC Suffers Rare Loss in Insider Trading Case Before Agency Judge

As observed in this blog and elsewhere, the U.S. Securities and Exchange Commission has aggressively pursued enforcement actions in administrative proceedings before its own Administrative Law Judges (ALJs), rather than before federal judges in the U.S. District Courts.  In response, defendants have begun raising constitutional challenges to the SEC’s administrative proceedings, claiming that the SEC’s hiring and removal process for ALJs violates the Appointments Clause in Article II, Section 2 of the Constitution.  On June 8, 2015, for the first time, a federal district court enjoined SEC administrative proceedings against defendant Charles L. Hill, accepting the claim that the SEC’s hiring process for ALJs violated the Appointments Clause.  
Continue Reading DOJ and SEC Dig In After Judicial Blow to SEC’s Home “Court” Advantage