The increasing trend of the U.S. Securities and Exchange Commission selecting its own administrative forum to litigate enforcement actions is now well documented. The doctrine of federal courts reviewing certain actions of administrative agencies with deference to the views of those agencies, established in 1984 in Chevron U.S.A. v. Natural Resources Defense Council, is not new.1 Recently, however, the convergence of these two areas has resulted in an emerging question—whether Chevron‘s principles of deference should still apply to the SEC’s administrative litigation process without limitation. In Chevron, the U.S. Supreme Court granted substantial deference to a rule-making interpretation by the EPA,2 and in subsequent decisions, the court has made clear that such deference extends to formal administrative adjudications.3 Yet it remains to be seen whether the SEC’s change in policy is consistent, or at odds, with the original rationale for Chevron deference.
The Dodd-Frank Wall Street Reform and Consumer Protection Act4 gave the SEC expanded authority in connection with its administrative actions.5 Recently, the SEC has increasingly turned to the administrative forum, rather than federal district court, to litigate enforcement actions, even for cases involving insider trading that have traditionally been brought in the federal court forum. The SEC has made clear that in certain cases it specifically chooses an administrative forum to influence the development of the law. In guidance issued on May 8, 2015 on forum selection in contested actions, the SEC stated that if a
