Back to the Future: The Use of Administrative Proceedings for Enforcement at the CFTC and SEC

Recent months have seen renewed attention to the use of administrative adjudication in government enforcement cases. First, the Securities and Exchange Commission (“SEC”) took several public steps to indicate and demonstrate that it intends to bring an increasing number of enforcement actions before administrative law judges rather than to federal court. This, in turn, has triggered a flurry of criticism from a variety of sources, including a prominent federal court judge with a history of pointed interactions with the SEC. While these events were unfolding, the Director of Enforcement at the Commodity Futures Trading Commission (“CFTC”) announced that Commission intends to start using the administrative adjudicatory process for enforcement cases, after a number of years in which it never did so. This article will summarize the recent developments and put them in the context of the history of these agencies’ use of administrative proceedings for enforcement, and the legal and policy issues surrounding that use.