The next constitutional challenge to the SEC’s administrative proceedings process may be the most high-profile one to date. This week, the SEC confirmed that after an over two-year holding pattern, it intends to move forward with its civil AP against SAC Capital founder Steven A. Cohen. Cohen’s attorney, David Boies, told the WSJ that Cohen intends to mount a constitutional challenge in federal court to the AP, and “would have filed that last week except for the settlement discussions that had been ongoing.”
According to the WSJ, the SEC now plans to “pare down” its case, which seeks a lifetime ban on Cohen managing outside money, to reflect the fact that one of the insider trading convictions of an employee Cohen allegedly failed to supervise (Michael Steinberg) has now been dropped. According to Bloomberg, Cohen may seek to bring that bar down to no more than three years. The SEC’s amended case will now reportedly focus on Cohen’s failure to supervise Mathew Martoma, another SAC employee whose conviction remains intact.
