• Another Constitutional Challenge to SEC Administrative Forum
  • January 10, 2015 | Author: Thomas K. Potter
  • Law Firm: Burr & Forman LLP - Nashville Office
  • The drumbeats of discontent grow louder against the SEC’s more frequent use of its internal administrative forum for enforcement cases. I wrote about the current spate of Constitutional challenges to the agency’s forum in an October 9 Law360 article.

    The SEC instituted administrative proceedings accusing Canadian Jordan Peixoto of insider-trading in options on shares of Herbalife Ltd. in advance of a hedge fund’s announcement of its short position in the stock. See In re Peixoto, Admin. Proc. File No. 3-16184 (Sept. 30, 2014).

    Peixoto’s suit seeking to enjoin his administrative prosecution collects the current theories, including an Article II challenge (Appointment Clause), Article V due process and equal-protection (for disparate treatment). See Peixoto v. SEC, No. 14-cv-8364 (USDC SDNY filed Oct. 20, 2014).