Lucia settles with SEC after eight years of litigation

Raymond Lucia, the plaintiff in the 2018 U.S. Supreme Court case Lucia v. SEC, reached a settlement with the U.S. Securities and Exchange Commission (SEC) on June 17 after eight years of litigation. The settlement requires Lucia to pay a $25,000 fine and allows him to reapply for reinstatement as an investment advisor.

The Lucia case challenged the constitutionality of the SEC’s appointment of its administrative law judges (ALJs). The U.S. Supreme Court ruled in June 2018 that the agency’s ALJ appointments violated the U.S. Constitution’s Appointments Clause. The court found that the SEC’s ALJs are inferior officers (rather than agency employees) who must be appointed by the agency’s commissioners as required by the Constitution’s Appointments Clause. Lucia’s case was sent back to the SEC for a new hearing before a different, constitutionally appointed ALJ.

ALJs are officials who preside over federal administrative hearings and serve as both the judge and the jury. The Administrative Procedure Act requires that ALJs preside over hearings during formal adjudication proceedings, but they may also preside over hearings during informal adjudication. Adjudication proceedings include agency determinations outside of the rulemaking process that aim to resolve disputes between either agencies and private parties or between two private parties

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