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D.C. Circuit Upholds Lawyer's Lifetime SEC Ban

By Dyanna Quizon, Esq. on December 20, 2011 | Last updated on March 21, 2019

There are many milestones in an attorney’s career that he or she can proudly brag about. Being the first attorney ever to receive a lifetime ban by the Securities and Exchange Commission because of ethical violations is surely not one of them.

Commercial litigator Steven Altman hasn’t tried to get the acknowledgement off his record without effort, however. But the D.C. Circuit Court of Appeals hampered his efforts to overturn the ban after it denied his request to review the agency’s decision on Friday.

“The Commission was entitled to rely on Altman’s knowledge of and duty to conform to the New York Bar disciplinary rules,” Judge Rogers wrote on behalf of the three-judge panel.

Altman was accused of trying to extort money for his client from the lawyer of a company under investigation by the SEC. After an administrative law judge found that Altman had indeed violated three of the New York Bar's disciplinary rules, the agency permanently banned Altman in 2010. It is believed to be the first permanent ban based on ethical violations ever issued by the agency.

Representing himself, Altman argued before the D.C. Circuit that the federal agency lacked the authority to issue a ban based on state disciplinary rules.

Although the state of New York has never brought any charges against him and the SEC has stated it would not bring disciplinary proceedings against an attorney without a judicial determination first, the D.C. Circuit held that Section 4C of the Securities Exchange Act of 1934 "by its plain terms ...authorizes the Commission to deny the privilege of appearance upon finding improper professional conduct," and it can use State Bar disciplinary rules to define appropriate conduct.

Steven Altman, however, is refusing to accept the blemish on his reputation without a fight. Although he is banned from the SEC, he is not banned from appearing in court. He has vowed to request a rehearing before a larger panel of the court or, failing that, appeal to the U.S. Supreme Court, according to Reuters.

As for practitioners who can use Altman's SEC troubles as an example, the case "certainly serves as a warning to counsel that all discussions between a lawyer and other parties are potentially discoverable," said Jacob Frankel, a former SEC lawyer.

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