The Office of Administrative Law Judges supports the Commission’s mission by conducting hearings, issuing initial decisions, and adjudicating ancillary matters in administrative proceedings. The Commission initiates an administrative proceeding by issuing an order instituting proceedings, which in most cases contains the Division of Enforcement’s allegations against one or more respondents. Where an order instituting proceedings directs that a public hearing be held before an administrative law judge for the purpose of taking evidence, the judge determines whether the allegations are true and issues an initial decision within a specific time period.
Administrative law judges serve as independent adjudicators. Under the Administrative Procedure Act and the Commission’s Rules of Practice, administrative law judges conduct public hearings in a manner similar to federal bench trials, at locations throughout the United States. They preside at and regulate the course of these hearings, which may include setting filing deadlines, issuing subpoenas, holding prehearing conferences, and ruling on motions. Following the hearing and consideration of the parties’ post-hearing submissions, the administrative law judge prepares an initial decision setting forth factual findings and legal conclusions and determining whether sanctions are warranted.
If a respondent fails to file an answer to the order instituting proceedings, appear at a conference or hearing, respond to a dispositive motion, or otherwise defend the proceeding, the administrative law judge may issue an initial decision finding the respondent in default and accepting the allegations in the order instituting proceedings as true. In certain proceedings, summary disposition, a decision based on the written submissions of the parties as opposed to a live hearing, may be used to resolve all or some of the issues.
Depending on the statutory basis for the proceeding, an administrative law judge may find that sanctions are warranted. Sanctions may include: cease-and-desist orders; investment company and officer-and-director bars; censures, suspensions, limitations on activities, or bars from the securities industry or participating in an offering of penny stock; censures or denials of the privilege of appearing or practicing before the Commission; disgorgement of ill-gotten gains; civil penalties; suspension or revocation of an issuer’s registered securities; and suspension or revocation of the registration of a broker, dealer, investment company, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. An administrative law judge may also order that a fair fund be established for the benefit of persons harmed by a respondent’s violations.
An administrative law judge’s initial decision is subject to de novo review by the Commission, which may affirm, reverse, modify, set aside, or remand for further proceedings. A party to the proceeding may petition the Commission for review, or the Commission may choose to review an initial decision on its own initiative. If a party does not file a timely petition for review, and the Commission does not order review on its own initiative, the Commission’s Rules of Practice provide that the Commission will issue an order stating that the initial decision has become final. Thus, an administrative law judge’s initial decision—including any factual findings, legal conclusions, and sanctions—does not take effect unless the Commission by order adopts such decision as its own. Appeals of Commission decisions may be taken to an appropriate U.S. Court of Appeals.
For fiscal year 2018 (October 1, 2017, to September 30, 2018), administrative law judges received 299 assignments (which included remanded proceedings and new proceedings instituted by an order instituting proceedings) and issued 77 initial decisions and 1,007 orders.
Under Quick Links, please find links to ALJ initial decisions and orders, along with related resources. The Office of the Secretary maintains webpages on open and closed proceedings under Administrative Proceeding Documents.
- ALJ Initial Decisions
- ALJ Orders
- Administrative Proceeding Documents
- Rules of Practice
- Instructions for Respondents
- Subpoena Form to Produce Documents
- Subpoena Form to Appear and Testify at a Hearing
- Subpoena Form to Appear and Testify at a Deposition
- Inability to Pay: Rule, Instructions, and Form D-A