Publisher: Reuters Author: Nate Raymond The U.S. Securities and Exchange Commission's controversial use of in-house…
A federal appeals court on Monday handed the U.S. Securities and Exchange Commission a victory in its use of in-house enforcement proceedings, rejecting a challenge by a former chief executive of Assisted Living Concepts Inc.
The 7th U.S. Circuit Court of Appeals in Chicago agreed with U.S. District Judge Rudolph Randa in Milwaukee that it lacked jurisdiction to hear former CEO Laurie Bebo’s constitutional challenge to the SEC administrative case against her until the regulator’s proceedings have concluded.
Circuit Judge David Hamilton said it was “fairly discernible” that Congress intended defendants like Bebo to “proceed exclusively through the statutory review scheme” rather than have federal courts hear their cases from the outset. Kate Maternowski, a lawyer for Bebo, said her client will continue pursuing her constitutional claims. SEC spokesman John Nester declined to comment. Monday’s decision is at odds with rulings by federal judges Richard Berman in Manhattan and Leigh Martin May in Atlanta.
They have halted SEC administrative cases on the grounds that the appointment of judges who handle them is likely unconstitutional.
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