SEC’s Post-Lucia Case Rehearings Largely for Show
By Rachel Graf
Aug. 31, 2018
A controversial decision delivered by an improperly appointed ALJ could be susceptible to drawn-out attacks in the federal courts. By offering to rehear dozens of cases at once, the SEC is metaphorically ripping off the Band-Aid, said Hofstra University School of Law professor Ronald Colombo. After a new hearing with an ALJ appointed by the appropriate agency head, these decisions would be constitutionally sound.
Of course, not all of the cases will have rehearings. Litigation is expensive, and respondents who have little reason to believe an ALJ reached the wrong outcome probably won’t pay for a new hearing.
For the SEC, the costs could pressure the agency into a greater number of settlements or ultimately cause it to pursue fewer investigations and enforcement actions, Colombo said.
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