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Government Enforcement Exposed - "The GEE"
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13 Jul 2018 Well, That Didn’t Take Long – and With No Fanfare, Decades of Administrative Law Are Upended

Perhaps the administration had this one in the can already. On Tuesday, less than three weeks after the U.S. Supreme Court decided Lucia, President Trump signed an executive order essentially applying the Supreme Court’s rationale in Lucia to the hiring of all administrative law judges (ALJs) in the federal government. Entitled, “Executive Order Excepting Administrative Law Judges from the Competitive Service,” the order creates a new exception from the federal government’s typical civil service hiring process for seemingly all ALJs, or at least those that perform adjudicative functions in regulatory enforcement proceedings. And, perhaps most importantly, tucked into the very end of the order, the order seemingly applies the same exception to removal of ALJs, thus apparently eliminating the requirement that ALJs only be removed…

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09 Jul 2018 Supreme Court Decides Lucia – But the Saga Continues

After almost two years (and six blog posts), we have reached the conclusion of the SEC v. Lucia saga. Except we haven’t.  The U.S. Supreme Court decided Lucia on June 21, 2018. However, just as Marvel movies now are simply prequels to the next action movie, the fractured collection of opinions in Lucia is simply a cliffhanger that sets the stage for sequel cases in future Terms.   Justice Kagan authored the six-Justice majority opinion and was joined by the Chief, and Justices Kennedy, Thomas, Alito, and Gorsuch. Justice Thomas, joined by Justice Gorsuch, concurred separately, offering their own expansive take on the Appointments Clause. Justice Breyer concurred in part and dissented in part. Justices Sotomayor and Ginsburg joined in the dissenting portion of Justice…

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17 May 2018 Don’t Overthink It! Advocate for Easy to Understand Jury Instructions to Effectively Communicate Your Case

Have you ever read a full set of jury instructions for a criminal trial, let alone a civil trial? What about just one instruction for one element of a crime? Can you recall Jack McCoy ever reciting the law to the jury in a closing argument on “Law and Order?” Jury instructions are a powerful tool and can play a vital role in communicating your client’s case to the jury. The key is making the instructions simple, concise and in plain English.  Far too often lawyers miss the opportunity to advocate for their clients and communicate with the jury – through the most powerful medium, the Court – simply because they fail to advocate for simpler, easier to understand jury instructions.   The education level…

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25 Apr 2018 LUCIA ORAL ARGUMENT HIGHLIGHTS PHILOSOPHICAL TENSIONS

  The Supreme Court heard oral argument Monday in Lucia v. SEC. And while it was not the “cage match” that some hoped for, it did raise important questions. Both the parties’ arguments and the Justices’ questions indicated that the Court has several conflicting issues to resolve in deciding whether SEC ALJs are hired in violation of the Appointments Clause. One of the tensions which got the most attention seemed to be whether SEC ALJs should be “politically accountable” to the President since they are essentially part of the executive branch or whether they should maintain a greater degree of “independence” because they function as adjudicators, akin to Article III judges. The Justices also spent substantial time trying to discern how their decision in Lucia…

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06 Apr 2018 COULD THE SUPREME COURT’S LUCIA ARGUMENT BECOME A CAGE MATCH?

    On April 23, the U.S. Supreme Court will hear what may be one of the most impactful cases for the Securities and Exchange Commission, and perhaps other federal administrative agencies, in a long time.  In Lucia v. SEC, the Supreme Court will hear arguments – including from the U.S. Solicitor General – that the way that the SEC’s administrative law judges (ALJs) are appointed violates the U.S. Constitution’s Appointments Clause.  For prior posts, see [Jan 23, 2018; Jan 16, 2018, Jan 24, 2017, Sept 2, 2016].   The briefing is essentially completed, and as the Solicitor General’s recent request for divided argument suggests, the battle-lines here are untraditional.  In fact, the divergent positions staked out by the three parties that are arguing (to…

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19 Feb 2018 Cybersecurity: CFTC Brings Enforcement Action For Faulty IT System

  This past week, the Commodity Futures Trading Commission (CFTC) settled an enforcement action in which it had alleged that futures commission merchant AMP Global Clearing LLC violated 17 C.F.R. 166.3 (duty of supervision) by failing to diligently supervise implementation of a critical component of its information systems security program (ISSP).  As a result, AMP suffered a cybersecurity breach that led to loss of nearly 100,000 files, including customers’ personal identifying information.  As a result of the settlement, AMP paid a $100,000 fine and, undoubtedly, faces significant other expenses in dealing with the customers for whom it lost private information.  AMP will also have to provide written verification to the CFTC of its efforts to strengthen its network security and ensure compliance with its ISSP….

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23 Jan 2018 First-Time Supreme Court Advocate Appointed to Argue the SEC’s Case in Lucia

  To follow-up on our previous post, on January 18, the Supreme Court appointed Anton Metlitsky of O’Melveny & Myers to argue on behalf of the SEC in Lucia after the Solicitor General abandoned its defense of the SEC’s position in its response to Lucia’s petition for certiorari. This will be Metlitsky’s first argument before the Supreme Court.   According to the National Law Journal, Supreme Court tradition dictates that the Circuit Justice for the circuit that decided the case – here, the D.C. Circuit – picks one of his or her former clerks in these situations. Chief Justice Roberts (Circuit Justice for the D.C. Circuit) selected Metlitsky, one of his former clerks. The article also stated that, according to tradition, the appointment goes to…

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16 Jan 2018 SEC’s Appointments Clause Dilemma Gets Worse

  On January 12, the Supreme Court granted certiorari in SEC v. Lucia, which will decide whether the Securities and Exchange Commission’s (SEC) administrative law judges (ALJs) are appointed consistently with the Constitution’s Appointments Clause. Unfortunately for the SEC, at least right now, no one is arguing that the SEC’s process is constitutional. What the Court does in this case will potentially upend not only the SEC’s ALJ process but other agencies’ as well.   As this blog has explained here and here, there is a clear circuit split on whether the way that the SEC hires its ALJs comports with the Appointments Clause. The Appointments Clause provides:   [The President] shall nominate, and by and with the Advice and Consent of the Senate, shall…

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02 Jan 2018 Supreme Court Addresses Cell Phone Privacy in Carpenter v. United States

  On November 29, 2017, the United States Supreme Court heard oral arguments in the case of Timothy Carpenter v. United States.  During argument, a majority of the justices appeared ready to place new limits on the ability of investigators to track the location of cell phone users.   Carpenter was convicted of masterminding a series of armed robberies (ironically, stealing new smart phones) in Ohio and Michigan.  Officials investigating the case sought records from cell phone providers for 16 different phone numbers, including Carpenter’s.  In so doing, they relied upon the Stored Communication Act (18 U.S.C. 2703).  This 1986 law allows phone companies to disclose records when the government can establish “specific and articulate facts showing that there are reasonable grounds to believe” the…

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09 Nov 2017 SEC Scrutiny Brings Sanity to Hot ICO Market

  Initial coin offerings (ICO) originally became popular because they appeared to hold the promise of easy access to capital, in exchange for a virtual token with some desirable function. For example, Playkey—an online gaming company—is presently raising money by selling tokens that will allow holders to access high powered computer systems for gaming. ICOs have raised more than $3 billion in 2017.   The tokens from these offerings can appreciate in value either because they are limited in number or because they are tied to the growth of the issuer’s enterprise. The Securities and Exchange Commission (SEC) has deemed the later kind of token to be a security. Accordingly, any entity seeking to offer tokens reflecting the value of the enterprise needs to follow…

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