Legal Seminar, Denver, CO

Timeline Leading up to Lucia

• Summer 2014 – SEC Enforcement Director Andrew Ceresney said the SEC would use its administrative forum more often. The SEC increased its ALJs from three to five. • November 2014 – Southern District of New York Judge Rakoff criticizes the SEC’s administrative proceedings at a PLI conference, noting its recent 100 percent win rate versus only 61 percent in the courts. • 2015 - Wall Street Journal and other media report on alleged ALJ agency biased • The SEC won against 86% of defendants in contested cases in its own courts from October 2010 through September 2015, according to an updated analysis by The Wall Street Journal— significantly higher than the agency’s 70% win rate in federal court.

WSJ Articles

• Andrew Ceresney, the SEC enforcement chief, said at a legal event in Washington this month that this comparison doesn’t take into account summary judgments in federal court. • The SEC won on summary judgment against 51 defendants and lost against five in the two years through September, according to previously unpublished SEC data. The agency doesn’t have data for earlier years, the officials said. Adding the summary judgments to the trial wins would give the SEC an overall win rate in federal court for the two years of 82%. • Judge Brenda Murray explained to the brokers that the commissioners who run the SEC and approve all the civil charges filed by the agency don’t want its judges second-guessing them. • “So for me to say I am wiping it out,” Ms. Murray said at the hearing last year, “it looks like I am saying to these presidential appointee commissioners, I am reversing you. And they don’t like that.” • Alj Elliott said that “The SEC can’t fire us, decide our pay or grade our performance,“ he said. ”There’s nothing the SEC can do to influence us and they don’t try to."\\ This prompted the SEC, on Nov. 30, 2017, to issue an order “ratifying” the historic appointments of its five sitting ALJs. • Burgess v. FDIC , No. 17-60579 (5th Cir. 2017).