Embattled CEO Takes SEC Case to 7th Circuit

     MILWAUKEE (CN) – A CEO under fire by securities regulators wants the 7th Circuit to revive her claims that she is being denied her right to a trial by jury.
     Laurie Bebo, the former head of Assisted Living Concepts Inc., had filed the complaint in early January over a portion of the Dodd-Frank Wall Street Reform and Consumer Protection Act that allows the Securities and Exchange Commission to hold administrative proceedings on charges that would have previously been tried in federal court.
     While the SEC is charging Bebo with going behind the backs of investors to falsify occupancy rates at Assisted Living Concepts facilities, Bebo took aim at the agency’s decision to hold an administrative hearing, circumventing her right to a jury trial.
     In its reply brief last month, the SEC told the U.S. District Court for the Eastern District of Wisconsin that it does not have jurisdiction over Bebo’s claims.
     “An exclusive remedial scheme created by Congress channels claims like plaintiff’s through the administrative process with direct review in the courts of appeals, thereby depriving this court of jurisdiction,” the agency said.
     Setting the stage for Bebo’s appeal to the 7th Circuit, U.S. District Judge Rudolph Randa dismissed the suit earlier this month.
     “The court finds that Bebo’s claims are compelling and meritorious, but whether that view is correct cannot be resolved here,” Randa wrote in his dismissal.
     “Bebo can raise her arguments before the SEC ALJ and on appeal to the commission,” he added. “Then, if the commission rules against her, Bebo can obtain judicial review in the court of appeals.”
     Randa closed the case March 3, and Bebo filed appeal documents on March 10.

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