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CALIFORNIA CORPORATE & SECURITIES LAW

Defending The SEC’s Choice Of The Administrative Home Court

Wharton Associate Professor David Zaring has written an article defending the Securities and Exchange Commission’s choice to litigate in administrative rather than federal courts.  He argues that administrative adjudication “violates no rights, nor offends the separation of powers”.  Yet, he acknowledges:

Lawyers often worry about administrative proceedings. “If given a choice … most practitioners would choose” district court “because of the availability of powerful discovery tools under the Federal Rules of Civil Procedure and a whole independent adjudicator,” opine the authors of one treatise [Am. Bar. Ass’n, The Securities Enforcement Manual]

Nor are the worries of the private bar unfounded.  The SEC is presumably rational in its choice of forum and will choose the venue in which it feels that it has the best chance of success.  Professor Zaring’s own statistics support this conclusion – in contested matters, the SEC won more than 70% of its cases.

The independence of administrative law judges has been a cause for concern since the days of the Roman empire.  The Code of Justinian famously intones: “Ne quis in sua causa iudicet vel sibi ius dicat.” CJ 3.5.0.  Generally this is translated as “no one should judge his own case”.  My own closer translation is “lest anyone should judge his own case or sit as judge for himself”.

Perhaps Sir William Blackstone was correct when he warned:

Every new tribunal, erected for the decision of facts, without the intervention of a jury, (whether composed of justices of the peace, commissioners of the revenue, judges of a court of conscience, or any other standing magistrates) is a step towards establishing aristocracy, the most oppressive of absolute governments.

Commentaries on the Laws of England, Book III, ch. 23.

CalPERS Names Communicator

CalPERS recently named Brad Pacheco to the post of Deputy Executive Officer for Communications & Stakeholder Relations.  A two decade CalPERS veteran, he will be responsible for oversight of external and internal communications and will direct activities that connect CalPERS staff to leadership of key stakeholder groups.

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