| WASHINGTON, June 30
WASHINGTON, June 30 The U.S. Securities and
Exchange Commission is hiring two new administrative law judges
and three law clerks as its lawyers turn increasingly to the
agency's administrative court as a preferred venue over federal
court for filing enforcement actions.
James Grimes, a former litigator in the civil division of
the U.S. Justice Department, joined the SEC as a judge on
Monday, the agency said.
The SEC also said three new law clerks were joining the
agency, and a second judge is expected to join the staff in
The three new lawyers are Darien Capron, William Weihao
Miller and Jessica Neiterman. The new hires will nearly double
the size of the SEC's administrative court, which currently has
three full-time judges.
The increased manpower will help meet growing demand since
the 2010 Dodd-Frank Wall Street reform law.
Prior to 2010, the SEC tended to file fewer cases in its own
administrative court because it was more limited in the kinds of
remedies it could seek. It could not, for instance, seek
financial penalties against the employees of firms it did not
regulate such as brokerages.
But Dodd-Frank changed that, by bestowing the regulator with
the power to seek financial penalties against a broader array of
That has given the SEC the incentive to use its own court
In fiscal 2013, the SEC brought 469 cases as administrative
proceedings, compared with only 207 in federal district court,
according to SEC data.
The numbers were more closely aligned in fiscal 2009, with
the SEC bringing 352 cases in administrative court versus 312 in
Although the bulk of the SEC's cases are typically settled,
some of the cases go to trial.
For administrative proceedings, that can involve a lot of
time-consuming work, and it may also require judges to travel to
venues outside of Washington, D.C.
Increasingly, more high-profile contested cases are being
filed in administrative court.
One of the most notable administrative trials that will be
coming up is the SEC's civil case against SAC Capital founder
Steven A. Cohen, who is accused of failing to supervise
employees who were convicted of insider-trading.
Earlier this year, the SEC also won a high-profile
administrative trial against the Chinese units of the "Big Four"
accounting firms in a dispute over access to audit work papers
of Chinese companies listed on U.S. stock exchanges.
Many defense attorneys have lamented the increased use of
administrative proceedings, saying they lack procedural
protections available in federal courts, including the ability
to take depositions, spend more time gathering evidence, and
present cases to juries.
The SEC has disputed such complaints, saying the venue is
fair. Any initial decisions can also be appealed, first to the
full five-member commission, and eventually, to a federal
(Reporting by Sarah N. Lynch; Editing by Tom Brown)