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[92WashLRev0315] Are the SEC’s Administrative Law Judges Biased? An Empirical Investigation

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dc.contributor.author Velikonja, Urska
dc.date.accessioned 2017-04-06T15:04:52Z
dc.date.available 2017-04-06T15:04:52Z
dc.date.issued 2017-03
dc.identifier.citation 92 Wash. L. Rev. 315 (2017) en_US
dc.identifier.issn 0043-0617
dc.identifier.uri http://hdl.handle.net/1773.1/1672
dc.description Volume 92, Number 1, March 2017 en_US
dc.description.abstract Urska Velikonja, Visiting Professor of Law, Georgetown University Law Center; Associate Professor of Law, Emory University School of Law. Abstract: The Dodd-Frank Act significantly expanded the SEC’s enforcement flexibility by authorizing the agency to choose whether to bring an enforcement action in court or in an administrative proceeding. The change has faced strong opposition. Federal courts have enjoined several enforcement actions filed in administrative proceedings for constitutional infirmities, and cases are currently winding their way through the appellate process. But even if any constitutional problems were remedied, controversy would persist. Judges, lawmakers, practitioners, and academics have raised doubts as to whether litigation before administrative law judges (“ALJs”) is fair to defendants. In advancing their arguments, they have relied heavily on a series of reports published in the Wall Street Journal purporting to show that the SEC enjoys a home-court advantage in litigation before ALJs. As documented in this Article, the evidence offered by the Wall Street Journal is deficient and its conclusions unfounded. This Article compiles and analyzes a large dataset of all enforcement actions filed in fiscal years 2007 to 2015. Contrary to the claim advanced by the Wall Street Journal and critics of administrative adjudication, SEC litigation before ALJs remains rare. Although the number of contested actions filed in the administrative forum has increased since Dodd-Frank, this is mostly due to an increase in actions that could have been litigated before ALJs prior to the Dodd-Frank amendment. More significantly, there is no robust correlation between the selected forum and case outcome. Federal district court judges ruled for the SEC and against defendants in 88% of cases, whereas ALJs ruled for the SEC in 90% of cases. This finding does not imply that the type of forum in which the SEC litigates does not matter. Rather, there are significant empirical obstacles to finding any useful results by comparing case outcomes. en_US
dc.language.iso en_US en_US
dc.publisher Seattle: Washington Law Review, University of Washington School of Law en_US
dc.subject Article en_US
dc.title [92WashLRev0315] Are the SEC’s Administrative Law Judges Biased? An Empirical Investigation en_US
dc.title.alternative Are the SEC’s Administrative Law Judges Biased? An Empirical Investigation en_US
dc.type Article en_US
dc.rights.holder Copyright 2017 by Washington Law Review Association. en_US

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