Recent changes to the Dodd-Frank Act means that more securities cases may be headed to administrative tribunals rather than federal district court by expanding who the agency can sue in the SEC Administrative Courts. Like many other state and federal agencies, the Securities and Exchange Commission has specialized courts that only decide cases from the agency on securities issues. While some worry about bias of the Administrative Law Judges (ALJ’s) hearing cases brought by their own agency, the counter-argument is that the specialized judges are more equipped to handle the hyper-technical area of law.
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So What Does Increased Use of SEC Administrative Courts Mean to Louisiana?
It remains to be seen whether Louisiana will join the other states in creating an independent administrative body of judges to hear securities cases. Louisiana already has an extensive network of administrative judges in the Workers’ Compensation system. Investors, companies, and anyone with dealings with the SEC should consult their counsel to make sure they would be equally ready to stand in an SEC administrative court as they would in district court.
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Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.