Steadman v. Securities & Exchange Commission

The Securities and Exchange Commission (SEC), acting under the antifraud provisions of the Investment Company Act of 1940 and the Investment Advisers Act of 1940, has imposed severe sanctions on petitioner. He has been barred permanently from practicing his profession and also forced to divest himself of an investment at a substantial loss. In making its findings of fraud and imposing these penalties, the SEC applied the “preponderance of the evidence” standard of proof.

The Court today sustains the action of the SEC, holding *105that § 7 (c) of the Administrative Procedure Act (APA), 5 U. S. C. §…