Last week, the Supreme Court ruled in Lucia v. SEC that SEC Administrative Law Judges are “officers” for the purposes of the Constitution’s Appointments Clause.
Not only does the decision require the rehearing of the petitioner’s case, but it leaves unanswered questions for the SEC and other agencies moving forward. Indeed, another trip up to the Supreme Court on a related constitutional issue involving the ALJs’ civil service protections seems likely. In the meantime, the SEC and other agencies will be forced to grapple with the legitimacy of their administrative proceedings, potentially impacting their enforcement efforts.
This Alert Memo was republished by Harvard Law School Forum on Corporate Governance and Financial Regulation as “Supreme Court Ruling on SEC-Appointed Judges.”