On November 11, 2010, BrokeAndBroker reported on the SEC's finding that Steven Altman, a lawyer, had engaged in unethical and improper professional conduct while representing a prospective witness in an SEC administrative proceeding, in violation of state bar disciplinary rules. In a rare move, the SEC permanently denied Altman the privilege of appearing or practicing before the SEC. In the Matter of Steven Altman, Esq, (Securities Exchange Act Of 1934 Rel. No. 63306 / Admin. Proc. File No. 3-12944, November 10, 2010).
On December 9, 2010, the Courthouse News Service (CNS) published an article titled: Attorney Declares War on SEC. The CNS story states that
Attorney Steven Altman sued the SEC in Federal Court, claiming the agency "has wrongfully sought to 'federalize' the subject of attorney ethics discipline" - a function of state judiciaries - by its Nov. 10 order permanently barring him from "appearing or practicing (law) before the Commission."
According to CNS, Altman claims that "there is absolutely no statutory authority granting the Commission to unilaterally apply part or even all of the New York State Disciplinary Rules to anyone." Moreover, the lawyer does not view his action as an appeal of the SEC's Opinion and Order but rather a "facial attack on the Commission's jurisdiction to bring the [underlying] proceeding."
CNS says that Altman argues that he has been "vilified by the Commission and in effect been accused of being and found to be unfit to practice law at all, a conclusion which is not in any way supported by and contrary to his record." Apparently, Altman alleges that the SEC's action was an "unconstitutional usurpation of the New York State Disciplinary Rules," and he concludes that such improper action violated his right to equal protection, due process and privacy. Altman seeks to enjoin the SEC's Order against him.
BrokeAndBroker.com has obtained copies (available via click of the cited documents) of Altman's Complaint and Memoradum of Law. Steven Altman, Plaintiff v. United States Securities and Exchange Commission, Mary Schapiro (Chairman), and Elizabeth M. Murphy (Secretary), Defendants (Southern District Court of New York, 10 CIV 9141, Dec. 7, 2010).
The Complaint pointedly dismisses the nature of the legal action as an "appeal," and characterizes the action as one seeking declaratory and preliminary and permanent injunctive relief against the SEC; and further seeking an Order of Mandamus directing the vacatur and stay of proceedings, decisions, and orders. The Complaint states that those subject proceedings, decisions, and orders constitute the first instance in which the Commission has
disciplined a lawyer solely for allegations of New York State's disciplinary rules without a prior hearing, determination or even charges brought against that lawyer by or under the New York State disciplinary procedures.
The Complaint describes the extent of damage sustained by Altman as a result of the SEC's action as
Plaintiff's reputation as a lawyer is his stock and trade. That reputation has been intentionally and permanently marred by the Commission's unconstitutional actions against him.