Tags: Lynn Tilton | Supreme Court | distressed assets | SEC

Supreme Court Declines Lynn Tilton's Bid to Block SEC Action

Supreme Court Declines Lynn Tilton's Bid to Block SEC Action

In this 2015 file photo, Lynn Tilton attends the 12th Annual Living Legends of Aviation Awards at The Beverly Hilton Hotel in Los Angeles. (Photo by Rob Latour/Invision/AP)

Tuesday, 27 September 2016 05:11 PM

The U.S. Supreme Court on Tuesday rejected a request by Lynn Tilton, the New York financier accused by the Securities and Exchange Commission of defrauding investors, to put on hold an SEC enforcement action as she challenges the agency's in-house judicial proceeding against her.

The court's action means that Tilton will face an Oct. 24 hearing before an SEC administrative law judge over whether she and her firm, Patriarch Partners, hid the poor performance of assets underlying her Zohar collateralized loan obligation funds, and collected nearly $200 million in improper fees.

Tilton, dubbed the "Diva of Distressed" for turning around troubled companies, has said SEC administrative proceedings are unfair to defendants like her, and that the means by which presiding judges are appointed violates the U.S. Constitution.

In a June ruling, the New York-based 2nd U.S. Circuit Court of Appeals rejected her challenge to the process, saying it was premature because the SEC had not finished its administrative case, and thus the court where she sued lacked jurisdiction.

Tilton and Patriarch sued the SEC again in Manhattan federal court on Sept. 9, seeking to prevent the commission from pursuing in-house enforcement actions.

That lawsuit accused the SEC of violating Tilton's constitutional rights to due process and equal protection.

Tilton and other defendants in SEC administrative proceedings have said the appointment of SEC administrative law judges and hurdles that can make it impossible for the U.S. president to remove those judges run afoul of the Constitution. Federal courts have so far ruled for the government.

 

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StreetTalk
The U.S. Supreme Court on Tuesday rejected a request by Lynn Tilton, the New York financier accused by the Securities and Exchange Commission of defrauding investors, to put on hold an SEC enforcement action as she challenges the agency's in-house judicial proceeding.
Lynn Tilton, Supreme Court, distressed assets, SEC
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2016-11-27
Tuesday, 27 September 2016 05:11 PM
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