The D.C. Circuit has affirmed that SEC ALJs are not constitutional Officers subject to the Appointments Clause, rejecting perhaps the strongest of the constitutional challenges to the Commission's administrative forum. The ruling is the first case to decide the issue on its merits instead of rejecting it on procedural grounds (as the 2nd, 7th, 11th and D.C. Circuits previously did).
The Court held the Commission's right of discretionary review, coupled with the requirement to issue an affirmative order declining it (where not exercised), means its ALJs do not issue final ...
SEC Commissioners Piwowar and Gallagher dissented from a recent Commission Opinion sanctioning an investment adviser's use of misleading historical data purporting to validate an asset-allocation model. Agreeing there was a violation, Piwowar and Gallagher nevertheless dissented, criticizing "rulemaking by opinion:"
Instead, the majority opinion creates from whole cloth specific requirements for advertisements that include the word "backtest." Despite the lack of any statutory or regulatory definition of what constitutes a "backtest," the majority opinion ...