The Wall Street Journal: SEC to change process for hiring in-house judges after legal challenge

WASHINGTON — A gambit by the Securities and Exchange Commission to bring more enforcement actions through its in-house courts has partly backfired.

The SEC said Thursday that it was changing the way it appoints in-house judges who hear some of its enforcement cases, one day after the Justice Department sided with opponents who say their hiring was unconstitutional.

The three-member commission said it directly approved the five judges’ appointments, instead of relying on a selection process managed by human-resources officials. The commission had previously maintained their hires were valid because the judges are employees, not officers who are subject to a constitutional clause that safeguards separation-of-powers principles.

The catalyst for the change is a legal challenge filed by Raymond Lucia, a California financial adviser who was accused of misleading investors and barred from the securities industry as punishment. Lucia has appealed to the U.S. Supreme Court, arguing the SEC judge who heard his case wasn’t appointed by the commission, as the Constitution requires. The Justice Department jolted the case on Wednesday when it told the Supreme Court that it now considers the SEC’s judges to be officers like other presidential appointees.

An expanded version of this report appears on WSJ.com.

Also popular on WSJ.com:

Six minutes to counterattack: South Korea shows plan to strike back at North’s missiles.

T. Boone Pickens lists longtime Texas ranch for $250 million.

Filed in: Top News Tags: 

You might like:

Why real-estate investors should steer clear of Turkey Why real-estate investors should steer clear of Turkey
NewsWatch: Meet the tech-savvy upstarts who think they can finally give Realtors a run for their money NewsWatch: Meet the tech-savvy upstarts who think they can finally give Realtors a run for their money
The Wall Street Journal: Trump slams social-media companies for ‘censorship’ of the right The Wall Street Journal: Trump slams social-media companies for ‘censorship’ of the right
Economic Preview: Sky is clear for sunny U.S. economy, but clouds are forming Economic Preview: Sky is clear for sunny U.S. economy, but clouds are forming
NewsWatch: The questions every investor should ask about Trump’s proposal to radically change how companies report earnings NewsWatch: The questions every investor should ask about Trump’s proposal to radically change how companies report earnings
Saving in a 401(k) for the first time? Here’s what you need to know Saving in a 401(k) for the first time? Here’s what you need to know
The Wall Street Journal: Kofi Annan, former UN secretary general, dies at 80 The Wall Street Journal: Kofi Annan, former UN secretary general, dies at 80
What you probably don’t know about Social Security What you probably don’t know about Social Security

Leave a Reply

Submit Comment
© 2018 Stock Investors News. All rights reserved. XHTML / CSS Valid.