On February 16th, the first U.S. appeals court to weigh in on whether Securities and Exchange Commission administrative law judges are constitutional announced it will reconsider an Aug. 9th decision in favor of the SEC.

The Aug 9th decision was made by a three-judge panel that upheld the SEC in-house courts on constitutional grounds. The U.S. Court of Appeals for the District of Columbia Circuit has scheduled now scheduled a full 10-judge panel to rehear the case on May 24. 

Raymond J. Lucia brought his case before the D.C. Circuit to fight a December 2013 decision from an SEC administrative law judge slapping him with a lifetime ban from investment-related work and $300,000 in fines in connection with claims that he had misled investors about the effectiveness of his “Buckets of Money” retirement strategy.

Lucia and other challengers contend that the SEC’s administrative law judges were hired improperlybecause neither the president nor the full commission made the appointment, which violates the Appointments Clause. A panel of the D.C. Circuit rejected that reasoning, holding that ALJ orders aren’t considered final actions of the agency.

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