Muni Adviser Challenges SEC In-House Move Revoking Registration

A firm advising charter schools on bond issues is suing to block a follow-on administrative action by the Securities and Exchange Commission, arguing that an order revoking the firm principal’s registration is unconstitutional and irreparably harmful.

A Colorado federal judge must now weigh whether to upend the SEC’s common practice of initiating follow-on in-house proceedings to seek an industry ban following an enforcement action in court.

The suit is the latest challenge to the SEC’s in-house system following the US Supreme Court’s 6-3 decision last June in Securities and Exchange Commission v. Jarkesy finding that defendants in agency enforcement actions ...