Lynn Tilton filed an unsuccessful suit to enjoin the SEC proceeding against her and her company, on the grounds that the appointment of the SEC administrative law judges was unconstitutional. The Second Circuit ruled in June of this year that the federal district court lacked jurisdiction over that suit. Tilton’s SEC proceeding was therefore free to proceed as scheduled.

Tilton, however, recently filed another suit earlier this month again challenging the constitutionality of the SEC in-house tribunals, this time on the grounds that the lack of notice and opportunity to prepare for trial adequately and present a defense violates the Fifth Amendment. Tilton again sought to enjoin the SEC proceeding on the $200 million fraud action against her in this new action.

Although Tilton’s attorneys argued that the new case should be assigned to a court hearing another pending constitutional challenge in the Southern District of New York (Duka v. SEC, No. I 5-CV-357), the case has ended up with Judge Ronnie Abrams, who presided over Tilton’s initial action.

Judge Abrams issued an order on September 20, 2016 in the action, stating that in light of the Second Circuit ruling in the first Tilton action that there is no federal district court jurisdiction over the constitutional challenge, Tilton must submit a written explanation by no later than September 27, 2016 as to why this new action is not similarly barred.

The newly-filed action is Case No. 16-cv-07048.

Jeff Petersen is an attorney licensed in California and Chicago who represents clients in a wide variety of SEC enforcement proceedings. He can be contacted in California at 858.792.3666 and in Chicago at 312.583.7488.