Antoniu v. Securities and Exchange Commission

Adrian Antoniu (plaintiff) was a securities broker-dealer registered with the Securities and Exchange Commission (SEC) (defendant). In 1980, Antoniu pleaded guilty to two counts of misappropriating information in securities markets in violation of several federal laws for his involvement in an insider-trading conspiracy. Antoniu provided nonpublic information regarding impending takeover bids of clients of two prominent securities firms that he worked for from 1972 to 1978 to a securities trader. The securities trader then bought large blocks of stock of targeted companies and sold them for profits, which were shared with Antoniu. Antoniu was convicted and eventually received a reduced sentence, in 1983, of 39 months of unsupervised probation and a $5,000 fine. In 1984, Antoniu sought approval for the employment with another securities firm from the National Association of Securities Dealers. The approval was granted in June 1985; however, the SEC vetoed that approval three months later in a proceeding referred to as Antoniu I. Two weeks after the veto, the SEC instituted a second proceeding referred to as Antoniu II to determine whether Antoniu should be excluded from any employment in the securities industry due to his conviction. While Antoniu II was pending, Commissioner Cox gave a speech regarding securities crimes and punishments, using Antoniu’s case for illustration. In the speech, the commissioner referred to Antoniu as an indifferent violator and concluded that Antoniu’s ban was permanent, although the matter had yet to be decided. Following the speech, Antoniu was denied attempts to develop the record regarding the commissioner’s bias and was denied a motion to disqualify the commissioner wherein the commissioner specifically refused to recuse himself from the proceedings. Cox participated in further proceedings, including the rejection of Antoniu’s proposed settlement, and only recused himself the day that the commission rendered its decision to ban Antoniu from association with any broker or dealer. Antoniu appealed the SEC’s decision, arguing among other grounds that the proceedings were biased or at least tainted with the appearance of impropriety.