Compliance & Regulation

Dawn Bennett Declines to Participate in SEC's 'Unconstitutional Administrative Proceeding'

Takes Principled Stand Against SEC Over-Reach

NEW YORK, NY–(Marketwired – Jan 27, 2016) – Dawn Bennett, a long-time local financial advisor, has affirmatively declined on principle to attend or participate in the Securities and Exchange Commission’s unconstitutional administrative proceeding against her and Bennett Group Financial Services, LLC.

The proceeding, held before an administrative law judge hired by the SEC itself, and not properly appointed by the Commission, began today in Washington, D.C.

Bennett has challenged the constitutionality of the SEC’s administrative proceeding, because the SEC’s administrative law judges, including the ALJ presiding over the proceeding against her, were not appointed in a manner consistent with the appointments clause of the United State Constitution, a conclusion with which a number of United States District Court judges have agreed.

Bennett has raised her constitutional challenge in the United States District Court, District of Maryland; with the Fourth Circuit Court of Appeals; with the Administrative Law Judge himself; and with the Commission’s Division of Enforcement. Her claim before the 4th Circuit is pending.


“I will not subject myself and Bennett Group Financial Services to an unconstitutional proceeding by the SEC. I know this has never been done before. But sometimes you have to stand up for what you believe in, even if there are personal consequences. I believe in the Constitution, so I won’t attend their kangaroo court. Any American businessperson can survey the regulatory landscape and be concerned about how the SEC is operating. It’s time to make a serious change, and you need to start some place,” Bennett said.

Gregory Morvillo, an attorney for Bennett, stated: “We asked the SEC, out of fairness, to adjourn the administrative proceeding until the constitutional question is resolved by the courts; they have refused. Ms. Bennett was therefore put in a position where she would have to risk defending herself twice; once in the proceeding that commenced today, and again later after the courts have addressed the constitutional question. In our view, that is patently unfair to Ms. Bennett, and the SEC shouldn’t put Ms. Bennett and others situated like her, in this unfair position.”

Eugene Ingoglia, an attorney for Bennett, stated: “Charges brought by the SEC should be litigated on an even playing field. The SEC has been on notice about the real constitutional concerns with their administrative hearing process, but has refused to remedy the problem and has instead doubled-down on its use of an unconstitutional process. By refusing to participate, Ms. Bennett is saying: I object.”

This is a problem of the SEC’s making, and different courts have handled it different ways. In the Second Circuit and in Georgia district courts, those in Bennett’s position have been granted stays pending the resolution of their challenges.

Bennett, based on her residence, is being forced to proceed where some others are not. It is manifestly unfair and as such, she is refusing to participate in the administrative proceedings at all, and continues to seek to challenge the unconstitutional nature of the process at the earliest possibility.

To be clear, Bennett denies any wrong-doing, knows that not defending the merits of her case now will result in a finding against her, but believes that standing up for her constitutional rights, and the rights of people who come after her, is bigger than her opportunity to contest the facts the SEC alleges in a suspect forum.




Morvillo LLP ( is a litigation firm with offices in New York and Washington, DC, that specializes in White Collar defense, SEC enforcement and other regulatory investigations, FCPA cases and civil securities litigation.