The SEC has stayed all administrative proceedings assigned to Administrative Law Judges if a decision could be appealed to the Tenth Circuit Court of Appeals (based in Denver) until time has expired to appeal to the Supreme Court. The SEC’s decision follows a Tenth Circuit decision (Bandimere v. SEC) that SEC ALJs are not appointed consistent with the U.S. Constitution’s Appointments Clause. The Tenth Circuit’s decision conflicts with other federal courts, which would provide grounds for the SEC to appeal the decision to the Supreme Court.
OUR TAKE: The SEC will only appeal to the Supreme Court if it thinks it will win because a loss would have significant consequences to previously-decided cases, other federal agencies, and the SEC’s operations. Instead, the SEC may just change the way it appoints ALJs and avoid a further federal imbroglio.