During eighteen months of legal wrangling over the constitutionality of the SEC’s in-house courts, individual respondents challenging such proceedings had found success in the district court in Georgia, where Judge Leigh May had found that the tribunals were constitutionally defective. This ruling went against the majority trend of rulings around the country on the issue.
What Exactly Happened
The 11th Circuit appellate court, however, recently put the issue to rest in Georgia – short of a U.S. Supreme Court opinion to the contrary in the future. The 11th Circuit declined to rehear its decision to overturn the ruling, and last week Judge May dismissed those constitutional challenges, pursuant to the order of the Eleventh Circuit panel hearing the SEC’s appeal.
What Does This Mean?
The takeaway from the 11th Circuit’s confirmation of its ruling is that, for now, the Circuit Courts have sided with the SEC that the agency’s in-house courts are constitutionally sound. We will keep readers apprised of future developments in this area.
Jeff Petersen is an attorney licensed in California and Illinois representing clients in a wide variety of SEC enforcement proceedings. He can be reached in California at 858.792.3666 and in Illinois at 312.583.7488.