As I observed here last week, there has been a recent flurry of cases filed by respondents in SEC administrative proceedings claiming that the SEC's use of these "APs" is unconstitutional for various reasons. Indeed, on Friday of last week, one such constitutional challenge was brought by a person who believes that an AP against her (which has not yet even been filed by the agency) is "imminent."

A recently-published analysis by the National Law Journal of the SEC's success rate in its APs reveals why respondents and potential respondents in those cases may be so motivated to have the cases against them filed in federal court instead. The NLJ reports that since the beginning of FY 2014 (i.e., October 1, 2013), the SEC has prevailed in each and every one of the 219 administrative cases in which there has been a decision.

The NLJ notes that while three-quarters of the 219 victories were by default, the remainder were contested--including 14 consecutive SEC victories in that period in cases that went to trial before an SEC Administrative Law Judge. By contrast, by my count the SEC's record in its 20 trials in federal court since October 1, 2013 is 7 victories, 7 losses, and 6 mixed verdicts, broken down as follows:

FY 2014: In FY 2014, SEC conducted a total of 17 federal court trials. Of those 17 trials, SEC had 5 outright victories in which it won on all of its claims, 7 losses in which it lost on all of its claims, and 5 mixed verdicts in which it won on some claims and lost on others.

FY 2015:(Oct. 1, 2014 to date): In FY 2015, the SEC has had 3 trials so far: 2 outright victories, no losses, and 1 mixed verdict.

SEC Enforcement Director Andrew Ceresney told the NLJ that he believes that APs are a fair process and that the evidence has supported the SEC's recent string of victories in such cases.

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