Bioelectronics Corp (BIEL)

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Federal Court Injunction Against SEC Prosecution

A federal judge in Manhattan recently granted a preliminary injunction against the Securities and Exchange Commission in the latest of a series of rulings raising issues with the SEC’s use of in-house proceedings before its administrative law judges (“ALJs”) rather than proceed with its charges in federal court.

In a ruling on August 12, 2015, Judge Richard Berman agreed and preliminarily enjoined the SEC from proceeding against Duka. He held that since ALJs are not appointed directly by the SEC Commissioners themselves but rather through a combination of the U.S. Office of Personnel Management and the Commission’s Office of Human Resources, “they were not appropriately appointed pursuant to Article II, [and] their appointment is likely unconstitutional in violation of the Appointments Clause.” [3] He enjoined the SEC “from in any way further pursuing the pending administrative proceeding” against Duka. [4]