Dec 16 (Reuters) - A federal appeals court on Friday
rejected a New York lawyer's bid to overturn a lifetime ban
preventing him from ever appearing before the Securities and Exchange Commission.
Steven Altman, a commercial litigator, argued that the SEC
overstepped its authority by banning him based on alleged
violations of New York's lawyer code of professional
responsibility. But the U.S. Court of Appeals for the D.C.
Circuit denied Altman's request to review the agency's
"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. The SEC
found that Altman had broken three ethical rules and that his
violations were "egregious, recurrent" and reflected a high
degree of awareness, the court noted.
Altman, who argued his own case on appeal, said he was
"disappointed with the court's decision" and that he intended
to request a rehearing before a larger panel of the court.
Failing that, he would appeal to the U.S. Supreme Court, he
The disciplinary action stemmed from taped phone
conversations from 2004 between Altman and the lawyer for a
company under investigation by the SEC. Altman claimed that he
was trying to negotiate a severance package for his client who
had been subpoenaed by the SEC in the probe. The SEC alleged
that the calls contained evidence of Altman trying to extort
money for his client in exchange for thwarting the
After filing an administrative proceeding against Altman,
the SEC in November 2010 permanently banned Altman from ever
appearing or practicing before the commission again. It was the
first time a lawyer received a lifetime ban for ethics
On appeal, Altman argued that the SEC lacked the authority
to issue a lifetime ban based on state disciplinary rules. That
was the exclusive province of the New York State disciplinary
system, he argued, which never brought any charges against
The SEC has stated a policy of not bringing disciplinary
proceedings against an attorney without a judicial
determination that the lawyer violated federal securities laws.
That policy does not prevent the commission from acting in
certain circumstances, the D.C. Circuit found.
The last time the SEC brought an administrative
proceeding against an attorney for alleged ethics violations
was 1988, court documents show. But just because the agency let
its powers "lie dormant" does not mean they were lost
altogether, the court ruled.
The lifetime ban only prevents Altman from appearing before
the SEC in administrative proceedings, not on his ability to
practice law in New York or appear before courts. But Altman
said the ban has inflicted a severe injury on his professional
In his appeal, Altman pointed to his otherwise unblemished
disciplinary record and the significant community service he
has performed. But the court found such factors could not undo
his improper professional conduct.
Jacob Frankel, a former SEC lawyer, said the activities of
lawyers were "an area of heightened vigilance" for the SEC's
enforcement division. But the commission understands that it
needs to tread carefully between clamping down on lawyer
misconduct and respecting the attorney-client relationship, he
The case "certainly serves as a warning to counsel that all
discussions between a lawyer and other parties are potentially
discoverable," he said.
SEC spokesman John Nester said the commission was pleased
the court recognized its authority to sanction attorneys. "The
opinion ensures that when an attorney's unethical conduct
threatens the integrity of the SEC's processes, the agency has
the power to respond," he said in a statement.
The case is Altman v. SEC, U.S. Court of Appeals for the
D.C. Circuit, No. 11-1067.
For Altman: Pro se.
For the SEC: Christopher Bruckmann.
(Reporting by Terry Baynes)
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