SEC Would Like To Keep Its In-House Judges, Please

The home-field advantage has been good to the Securities and Exchange Commission.
Author:
Updated:
Original:

Who could object to this sight?

The SEC boasts an impressively higher batting average in bludgeoning accused wrongdoers at home than on the road. So it is understandably perturbed that at least one federal judge thinks Congress may have gone a bit far by giving the agency home-field advantage more or less whenever it wants it.

A pivotal decision came June 8 from U.S. District Judge Leigh Martin May in Atlanta, who issued an injunction on the SEC's administrative case against Charles Hill, an Atlanta real estate developer accused of insider trading, saying that he had a “substantial likelihood of success” of making the unconstitutional argument stick because the in-house judges are essentially hired by the SEC instead of following the U.S. Constitution's appointments clause. “This likely appointment clause violation goes to the validity of the (administrative) proceeding,” Ms. May said….

SEC lawyers appealed Ms. May's decision on June 24, and asked the court to lift the injunction, arguing that it “interferes with the SEC's ability to enforce” securities laws.

SEC on defensive following setback on use of hearings [P&I]

Related

SEC Burns Whistleblower In The Most SEC Way Possible

In recent years, the Securities and Exchange Commission has had its share a fuck-ups come to light. The regulator took a pass on heeding the warning signals by Bernie Madoff himself that he was running a Ponzi scheme, it chose to go after David Einhorn rather than Allied Capital when the hedge fund manager suggested all was not right at the company, and yesterday, it was announced that the Commission is suing Egan-Jones for lying about having rated 150 ABS bonds on an SEC application four years ago (in reality it had rated zero), information that could have been fact-checked at the time but was not because there were new clips on www.ladyboyjuice.com, www.anal-sins.com, and www.fuck-my-wife.com to watch. Today the team scored a new victory when it outed an informant. Federal securities regulators, in a sensitive breach, inadvertently revealed the identity of a whistleblower during a probe of a firm that ran a stock trading platform. The gaffe by the Securities and Exchange Commission occurred during an investigation of Pipeline Trading Systems LLC when an SEC lawyer showed an executive who was being questioned a notebook from the whistleblower filled with jottings about trades, calls and meetings. The executive says he recognized the handwriting. Pipeline, which didn't admit or deny the allegations, was the subject of a page-one Wall Street Journal article earlier this month. The article didn't name the whistleblower, but he has now agreed to be publicly identified. He is Peter C. Earle, 41, a former employee of a Pipeline trading affiliate. Mr. Earle said he was "disappointed" the SEC took steps in its probe that ended up disclosing his identity to Pipeline. The SEC confirmed showing the notebook to an executive of the business it was investigating. SEC officials said there is always a risk a whistleblower's identity might be disclosed during an investigation, but its practice has been to avoid unnecessarily revealing an informant's identity. The person shown the notebook (in a November 2010 SEC interview), Gordon Henderson, was the head of Pipeline's trading affiliate, Milstream Strategy Group. He said in an interview that he previously suspected Mr. Earle was an SEC informant. Mr. Henderson's desk was near Mr. Earle's in Milstream's New York office, and he said he recognized Mr. Earle's handwriting in the notebook. Related: "Mr. Earle said he made other internal complaints about trading, and was fired on April 3, 2009. Mr. Henderson said the reasons for dismissal included poor performance and a belief Mr. Earle was having an affair with the wife of another Milstream trader at the time. Mr. Earle denied both allegations, calling the notion of poor performance 'ridiculous.'" Source's Cover Blown By SEC [SEC]