The investment banker Lynn Tilton and her firm, Patriarch Partners, found two Denver federal appeals court judges who agree with the argument that it is unconstitutional for the Securities and Exchange Commission to try cases before administrative law judges.
Known as the “Diva of Distressed Debt,” Tilton was sued in 2015 by the SEC on the allegation that she hid the poor performance of her $2.5 billion portfolio from investors. The SEC alleges that Tilton wrongly billed $200 million in fees as a result.
Tilton tried to keep her case out of the SEC’s courts, arguing the proceedings were unconstitutional, a point argued valiantly but unsuccessfully for almost two years. Two New York courts turned aside her argument. A ruling on her case is expected early next year.
While the Denver decision is not related to Tilton’s case, it could still help her, should the decision in her case go against her.