On Dec. 27, 2016, the United States Court of Appeals for the Tenth Circuit held in Bandimere v. U.S. SEC that the SEC’s administrative law judges (ALJs) hold their positions in violation of the Appointments Clause of the United States Constitution. The court held that SEC ALJs are inferior officers, rather than mere employees of the agency, and that the ALJ in the Bandimere case held his office unconstitutionally. Because SEC ALJs preside over many SEC enforcement actions, the Bandimere holding potentially undermines the constitutionality of SEC ALJ proceedings and the rulings on a countless number of enforcement cases. The Bandimere ruling creates a circuit split with the D.C. Circuit’s decision earlier this year in Lucia v. SEC.
A GT Alert regarding the Bandimere decision is available at:
The Bandimere decision is available at: