Personal Liberties

Lucia v. Securities and Exchange Commission

Administrative concentration of judge-jury-executioner violates the Constitution

In 2012, the Securities and Exchange Commission charged Raymond Lucia and his former investment company with violating federal securities laws and regulations. He was prosecuted in an administrative enforcement action overseen by an Administrative Law Judge employed by the SEC. The ALJ permanently barred Mr. Lucia from working as an investment adviser, revoked his company’s registration, and ordered $300,000 in “civil” penalties. PLF supported Mr. Lucia’s petition asking the Supreme Court to review his case, which implicates the fundamental constitutional issue of separation of powers. On June 21, 2018, the Supreme Court ruled 6-3 that the ALJ had not been appointed through the Appointments Clause and therefore Mr. Lucia’s hearing was invalid. His case goes back to the SEC for a hearing in front of a different, properly appointed ALJ.

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