It is probably not a stretch to say that the Securities and Exchange Commission likes to win every case that it decides to bring.
But a recent push by the agency to bring more cases before its administrative law judges rather than filing charges in federal district court is drawing increased attacks from defense lawyers claiming that the entire process is not just unfair, but also unconstitutional. Those criticisms could call into question the legality of the process used by a number of federal agencies that have in-house judges who decide whether laws were violated.
The issue has come to the forefront at the S.E.C. because of a change made by the Dodd-Frank Act in 2010 that lets the agency bring almost any case before an administrative law judge. Before then, charges over violations to the securities laws that involved corporate officers or those trading on inside information had to be brought in a federal district court, if the agency was seeking a penalty like a fine or ban from serving as an officer or director of a company.