Tenth Circuit Court of Appeals Finds SEC’s Process for Designating Administrative Law Judges to be Defective, Causing Split with DC Circuit

January 06, 2017

The U.S. Court of Appeals for the Tenth Circuit on December 27, 2016, in Bandimere v. SEC, found the Administrative Law Judges (ALJs) used by the U.S. Securities and Exchange Commission (SEC) to hear its administrative enforcement cases to be “inferior officers,” subject to appointment under the “Appointments Clause” of the U.S. Constitution. This decision sets aside the SEC’s ruling on the petitioner’s alleged securities laws violations on the grounds that the ALJ who presided over the initial hearing held his position unconstitutionally.

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