SEC Issues Order Addressing How it Will Proceed with Pending Administrative Actions

Originally published by Carrington Coleman.

Late last month, the SEC issued an order detailing how it would proceed with administrative actions pending before the SEC in light of the Supreme Court’s recent ruling in Lucia v. S.E.C., No. 17-130, which found that the SEC’s Administrative Law Judges (“ALJs”) must be appointed by the SEC Commissioners, not the SEC staff, as had been done previously. Shortly after the Supreme Court’s decision in Lucia, the SEC stayed any pending administrative proceedings.

The SEC’s order lifted the stay and reiterated that the Commission approved of all of the ALJs’ appointments as its own. The order then explained that the SEC would permit any respondent with a proceeding pending before an ALJ or before the Commission on an appeal from an ALJ decision to be provided with an opportunity for a new hearing before an ALJ who did not previously participate in the manner. The order explained that the new ALJ, “shall not give weight to or otherwise presume the correctness of any prior opinions, orders, or rulings issued in the matter.” New assignments must be made prior to September 21, 2018.

The SEC’s order addresses the Supreme Court’s concern in Lucia’s case that on remand, the ALJ who conducted the initial hearing could not be expected to consider the matter as though he had not adjudicated it before in a new hearing, even after receiving a constitutionally valid appointment. The order, however, is silent about any relief for respondents with non-pending cases that were previously decided by an ALJ without a constitutionally valid appointment.

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