Constitutional challenges to the SEC’s use of administrative proceedings to carry out enforcement actions continue to find no success in federal circuit court. Last week, the Eleventh Circuit joined three other circuits that have considered and rejected such challenges when it ruled in the SEC’s favor in two cases that had been consolidated for appeal: SEC v. Gray Financial Group and SEC v. Hill.
The Eleventh Circuit’s ruling follows the June 1, 2016 ruling of the Second Circuit, which similarly held in Tilton v. SEC that federal courts do not have subject matter jurisdiction over challenges to the constitutionality of the SEC’s APs. Therefore, these appellate courts have consistently held, SEC respondents in APs may not seek the aid of a federal court until the SEC’s action against them is concluded.
