The SEC lost twice Thursday in bids to preserve its internal court system for meting out justice in the securities markets, but there may be light at the end of the tunnel at least in one case.  

A federal appeals court in Manhattan on Thursday agreed to halt an in-house hearing for Lynn Tilton, known as the Diva of Distressed, which was set to begin Oct. 13. The SEC accuses Tilton and her firm, Patriarch Partners, of misleading investors about the value of risky pools of corporate loans.

Tilton had asked the appeals court Wednesday for the delay until she can fully challenge a lower court’s ruling that federal court judges don’t have authority to hear her claims that the regulator’s process is unconstitutional. U.S. District Judge Ronnie Abrams in June ruled Tilton must go through the SEC’s administrative process before challenging the handling of her case or its outcome.

The judges on the appeals panel on Wednesday noted that Abrams and another federal judge came to opposite conclusions in similar cases. U.S. District Judge Richard Berman ruled in August that the appointments probably violate the Constitution in the case of former Standard & Poor’s executive Barbara Duka.

U.S. Circuit Court Judges Jon Newman asked a lawyer for the regulator Wednesday whether it would consent to a delay of Tilton’s case to give the panel time to consider the matter. Newman indicated regulators had a chance to improve their chances of winning.

“All I’m suggesting is the environment for getting what you want will be enhanced if you agree to a stay,” the judge said.

The lawyer said the agency wouldn’t agree to a delay.

David Zornow, a lawyer for Tilton, and Judith Burns, a spokeswoman for the SEC, declined to comment on the appeals court’s ruling.   Berman on Thursday denied the SEC’s request that he delay enforcement of his order barring its case against Duka.

Duka, Tilton and other defendants in SEC cases have claimed the in-house judges are illegally chosen through the agency’s hiring process rather than appointed by its commissioners as the Constitution requires.

The SEC, which is appealing Berman’s order, claims it interferes with the its “ability to enforce the securities laws and to deter future violations.” Duka argued she shouldn’t be forced to endure an illegal SEC proceeding with fewer legal safeguards than she would receive in federal court.