Court Finds SEC Administrative Proceeding Constitutional
Section 929P(a) of the Dodd-Frank Act provides that the SEC’s authority in administrative penalty proceedings is “coextensive” with its authority to seek penalties in federal court. The plaintiff in Bebo v SEC argued the Dodd-Frank Act violates equal protection and due process because it gives the SEC unfettered discretion through its choice of forum to provide (if federal) or withhold (if administrative) a citizen’s Seventh Amendment jury trial right for the same conduct and the same remedies.
The court found in favor of the SEC. According to the court, the plaintiff’s argument regarding the lack of meaningful judicial review lies in her objection to being subject to a procedure that she contends is wholly unconstitutional. However, the court found district court jurisdiction “is not an escape hatch for litigants to delay or derail an administrative action when statutory channels of review are entirely adequate.” If the process is constitutionally defective, plaintiff can obtain relief before the SEC, if not the court of appeals.
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