Compliance officer wins attorneys fee award from SEC


Compliant not “substantially justified”, ALJ orders SEC to pay attorneys fees.

By John M. Baker, Esq.

A compliance officer recently had a major win against the SEC under the Equal Access to Justice Act, which provides for reimbursement of attorney fees in some cases when an administrative agency’s position is not substantially justified.

An administrative law judge reviewed the original allegations and concluded that the claimant, a compliance officer, was forced to defend himself against failure-to-supervise allegations with no basis at all in law. She also ruled that the evidence was lacking to support the position that the compliance officer was a supervisor, that he had the responsibility, ability or authority to affect the allegedly improper conduct, or that his own conduct was in any way unreasonable.

Although the compliance officer’s legal fees were advanced by his employer, which had settled with the SEC, the ALJ ruled that to deny an EAJA award for this reason would thwart the EAJA’s purpose. The ALJ seemed to find it significant that the employer would have been an eligible claimant under the EAJA.

The claimant was granted an award of $211,943.27, which included fees claimed for the EAJA proceeding. The claimant apparently intends to use the proceeds to repay his employer.

The opinion is available online at

Copyright 2000, John M. Baker, Esq., Stradley, Ronon, Stevens & Young, LLP, 1220 19th Street, N.W., Suite 700, Washington, DC 20036 – (202) 822-9611- Fax (202) 822-0140 This article was originally posted to the FundLaw List, To subscribe to FundLaw, send a blank e-mail to

Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.


Securities Attorney at Sallah Astarita & Cox | 212-509-6544 | | Website | + posts

Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.

He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page -, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.