Raymond Lucia, the creator of a "Buckets of Money" retirement plan that brought him both fame and accusations of fraud, has fired a new salvo in his seven-year court battle with the U.S. Securities and Exchange Commission.
The former celebrity investment advisor has asked the U.S. Court of Appeals for the Ninth Circuit to halt plans by the SEC to retry him on civil fraud charges, arguing that the proceeding is unconstitutional, according to a press release issued yesterday by the New Civil Liberties Alliance (NCLA), a nonprofit legal advocacy group that is representing Lucia.
"Ray Lucia has been put through the ringer and then some," Mark Chenoweth, NCLA executive director and general counsel, said in a prepared statement. "The Ninth Circuit should allow the constitutional questions to be resolved now rather than subject Ray to yet another constitutionally defective SEC proceeding."
The case against Lucia started in 2012, when the SEC filed a complaint alleging that his "Buckets of Money" retirement strategy—a plan he touted on his own nationally syndicated radio and TV shows, and in guest appearances on Fox News and other networks—used false data to mislead investors. After holding a hearing before an administrative law judge, the SEC barred Lucia from the industry the following year and fined him $300,000.
Lucia appealed the ruling in federal court, however, and eventually was victorious last year in the U.S. Supreme Court, which ruled that his SEC hearing was unconstitutional because the in-house administrative law judge in his case was not properly appointed. The court said the judge was a constitutional "officer" and needed to be directly appointed by the SEC rather than agency staff. As a result, Lucia's hearing was declared invalid.
The decision had ramifications beyond Lucia, with the SEC being forced to retry over 120 cases by administrative judges whose appointments were deemed constitutionally defective.
As part of the SEC response, agency commissioners reaffirmed their in-house judge appointments and rescheduled new hearings with new judges. Lucia's lawyers have since challenged the constitutionality of Lucia's new SEC hearing in a lawsuit filed in U.S. District Court. The court later ruled it doesn't have jurisdiction in the case, according to the NCLA press release.
In its filing with the appellate court, the NCLA is arguing that the SEC's new proceeding against Lucia should be halted so the appeals court can determine whether the district court has jurisdiction in the case.
"[The] SEC’s renewed enforcement action threatens to put the Lucia plaintiffs through a repeated yearslong exercise in futility," the motion states. "This suit seeks to prevent such an unjust, destructive and Kafkaesque outcome."
Lucia, 69, announced that he would be retiring from radio broadcasting in June 2019, according to a report by the Talkers media news website.
The SEC did not immediately respond to a request for comment.