Supreme Court Rules Appointments Process for SEC Judges is ‘Unconstitutional’

Team SoOLEGAL 22 Jun 2018 3:00pm

Supreme Court Rules Appointments Process for SEC Judges is ‘Unconstitutional’

The U.S. Supreme Court has taken a step towards giving presidents control over administrative agencies, after it ruled on Thursday that the way the Securities and Exchange Commission (SEC) appointed in-house judges overseeing investor protection laws violated the U.S. Constitution.

The US Supreme Court decision came when the court was hearing a case brought by Raymond Lucia, who had been fined $300,000 and barred from working as an investment adviser by an SEC administrative law judge, on the grounds of committing fraud.

However, Mr. Lucia filed an appeal in the Supreme Court challenging the standing of the judge, saying that the Constitution required the judges to be hired through a political appointment.

President Donald Trump’s administration also sided with Lucia, arguing that the appointment process for judges followed by the SEC was unconstitutional.

According to an online source (, “the Trump’s administration move amounts to a broadside aimed at the 1,900 administrative law judges (ALJs) who help federal agencies enforce laws and are a key part of the administrative deep state that the US President has vowed to dismantle.”

The court’s 7-2 decision backed Mr. Lucia, saying that the in-house SEC judge who handled his case wasn’t properly appointed.

Writing for six judges in the majority, liberal Justice Elena Kagan said Lucia will be allowed a fresh hearing before a different judge or the commission itself.

Justice Kagan also said that, “the original judge "cannot be expected to consider the matter as though he had not adjudicated it before”.

The SC ruling could influence about 100 cases pending before the SEC, along with a dozen other appeals pending before the federal courts.

The ruling could also affect administrative law judges at other government agencies that have duties similar to those of the SEC judges.

More specifically, the ruling could also make judges vulnerable to being fired for not abiding by commission priorities. 

Tagged: Securities and Exchange Commission   US Supreme Court   US President   Trump Administration   US Constitution  
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