The issue of whether administrative law judges lack constitutional authority to preside over Securities and Exchange Commission civil enforcement actions was on the front burner in two federal courts in lower Manhattan Wednesday.
At the U.S. Court of Appeals for the Second Circuit, David Zornow, who represents investment advisor Lynn Tilton, asked the panel to block an Oct. 13 hearing by an administrative law judge (ALJ) who was hired by the SEC but not appointed by its commissioners. Zornow claims that violates the Appointments Clause in Article II of the U.S. Constitution requiring the president or heads of his departments to appoint all “inferior officers.”
