Administrative Law Judges

Comparison of SEC and CFTC Programs Gao ID: GGD-96-27 November 14, 1995

Generally, Administrative Law Judges (ALJ) at the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) serve as hearing officers in cases involving violations of securities and futures laws. In response to press reports that CFTC routinely reversed or scaled back penalties imposed by its ALJs, this report compares the ALJ programs at the two agencies, including case-processing times and the results of appeals of ALJ decisions. GAO also provides information on budgets, staffing, and caseload statistics for both agencies' ALJ operations.

GAO found that: (1) ALJ programs at SEC and CFTC are similar in function, size, case-processing time, and results of appeals for enforcement cases; (2) SEC ALJ do not have the same authority as CFTC ALJ in hearing reparations cases; (3) the average processing time for initial decisions concerning enforcement cases is 9 months longer at CFTC than at SEC and 4 months longer at SEC for appeal decisions; (4) a SEC task force has proposed changes to SEC procedures in order to cut processing time for ALJ cases; and (5) SEC has reduced the sanctions imposed in 70 percent of its cases and CFTC has reduced sanctions imposed in 80 percent of its cases.

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