In an article for Financial Advisor IQ, Bass, Berry & Sims attorney Britt Latham discussed the June 21, 2018, decision by the Supreme Court in Lucia v. SEC. Following a ruling by an administrative law judge (ALJ), Raymond Lucia, a financial advisor, had been banned and fined by the SEC for misleading prospective clients. In the appeal, Lucia argued that the ruling was unconstitutional in violation of the Appointments Clause because ALJ’s are hired by the SEC, instead of being appointed by the president, courts or heads of government departments. The Supreme Court majority agreed with Lucia and held that the hiring – as opposed to the appointment – of SEC ALJs was unconstitutional. 

This decision could have far reaching implications beyond the SEC. As Britt points out, “besides the SEC there are agencies directly in the financial services space whose judges could be impacted by this decision. The FDIC and the Consumer Financial Protection Bureau could also see people appealing the decisions of their in-house judges by using this opinion.”

The full article, “Banned Advisor Says He’s Vindicated by Supreme Court Win – No Need for a New Hearing,” was published by Financial Advisor IQ on June 22, 2018, and is available online.