At the annual SEC Speaks conference last week, Matthew Solomon, Chief Litigation Counsel in the Division of Enforcement, said pretty much exactly what you would expect someone in his position to say in response to criticism of the SEC’s use of administrative proceedings in order to supposedly gain a “home court advantage.”
Solomon flatly refuted the notion that the SEC was in any way “shying away from federal court” in favor of APs. He pointed out that, in fact, the agency had an extraordinarily busy year in federal court, going undefeated in 27 federal court trials in its FY 2015 (while actually losing in two APs). He also stated that despite recent constitutional challenges, APs “play a crucial role in our enforcement program and will continue to [ ] in the years to come.” To date, the two appellate courts that have considered constitutional challenges to the SEC’s use of APs have both found in favor of the SEC (Bebo v. SEC in the Seventh Circuit and Jarkesy v. SEC in the D.C. Circuit). Solomon added that any assertion that the SEC was seeking a “home court advantage” though its use of APs was “garbage.”
