Last week, the United States Court of Appeals for the10^th Circuit ruled that a decision by a Securities and Exchange Commissionadministrative law judge was unconstitutional.

The 10^th Circuit’s decision in David V. Bandimerev. SEC is the latest to address the constitutional standing ofthe SEC’s five career administrative judges.

It also creates a circuit split, which some experts say willinvite a review by the Supreme Court on the matter. In August of2016, the District of Columbia Court of Appeals unanimously upheldthe constitutionality of the SEC’s administrative law judges in aseparate SEC decision.

At issue is whether the SEC’s administrative judges are mereemployees of a federal agency, or whether the extent of their powermakes them “inferior officers” of the federal government. Thelatter distinction requires a presidential, court, or agency-headappointment under the Appointments clause of the U.S.Constitution.

Currently, the SEC’s administrative judges are not subject tothe Constitution’s Appointment clause.

In Raymond J. Lucia Cos., Inc. v SEC, the D.C. Circuitconcluded that SEC’s administrative judges are employees, and notin need of an appointment to carry out their duties. That decisionwas based on the fact that a decision by the Commission’s internaljudges can be appealed for review by the SEC’s presidentiallyappointed commissioners.

The 10^th Circuit’s December ruling addressed the samequestion, albeit in a different decision rendered by an SECadministrative judge.

That appellate court ruled that the SEC’s judges act as inferiorofficers, based on the extent of their authority. As such, theyrequire presidential, court, or agency appointment to execute theirauthority, according to the 10^th Circuit.

The 10^th Circuit’s decision relied on a 1991SupremeCourt ruling in Freytag v. Commissioner of InternalRevenue.

In that case, the Supreme Court ruled that special trial judgesin IRS tax courts are inferior officers, and are subject to theConstitution’s Appointment clause.

The December decision in the 10^th Circuit did notconsider the merits in the original allegations brought by the SECagainst the defendant.

Rather, it limited its opinion to the question of whether or notSEC’s administrative judges require compliance with theConstitution’s Appointment clause.

“Because the SEC ALJ [administrative law judge] was notconstitutionally appointed, he held his office in violation of theAppointments Clause,” the 10^th circuit ruled in atwo-to-one decision.

Senior Judge Monroe McKay, a 1977 President Carter appointee to10^th Circuit, disagreed with the majority on legalmerits.

In his dissent, McKay expressed concern that the 10^thCircuit decision rescinding the constitutional authority of theSEC’s administrative judge will open a Pandora’s box, andeffectively invalidate “thousands” of previous administrativeactions by the SEC.

That would allow countless “malefactors who have abused thefinancial system to escape responsibility,” wrote McKay in hisdissent.

Related: 2016 rogues' gallery

The SEC has authority to pursue civil action against allegedviolators of securities laws through internal administrativecourts.

For fiscal year 2016, SEC’s judges issued 170 initial decisions,held eleven hearings, and ordered approximately $12.4 million indisgorgement and approximately $14.5 million in civil penalties,according to the Commission’s website.

In 2015, a Wall Street Journal investigation found that between2010 and 2015, the SEC won 90 percent of cases heard by its ownjudges, compared to a 69 percent success rate in cases heard infederal courts.

That report alleged bias within the SEC’s Office ofAdministrative Law Judges, citing the claims of a retired SECjudge. A subsequent internal investigation by the SEC’s inspectorgeneral found the claims in the Journal’s reporting wereunfounded.

If or when the Supreme Court rules on the constitutionality ofthe SEC’s administrative law judges, it will no doubt have toconsider Judge McKay’s concerns regarding past rulings.

Related: 2015's worst financialadvisors

Below is just a snapshot of the cases that have come underreview in the administrative courts in the past couple of months. They represent a drop in the bucket of the thousands of pastdecisions the 10^th Circuit’s ruling has called intoquestion.

1. Christopher A. T. Pedras

In December, an Initial Decision from the SEC barred Pedras fromthe securities industry.

According to the decision, Pedras, as a U.S. citizen, beganoffering and selling unregistered securities in 2010. He raisedover $5.6 million from more than 50 U.S. investors to fund a Ponzischeme, promising returns of up to 8 percent per month by investingin gold contracts. Unable to meet his obligations, he initiatedanother scheme, this time promising investors they could almostdouble their investment in a New Zealand kidney dialysis companyovernight.

Neither investment program was real. Pedras made off with $2million in investors’ cash. He was recently extradited from Tongato face criminal charges. He currently makes his home in a LosAngeles-based federal penitentiary.

He has been ordered to pay over $5.2 million in disgorgement,interest, and civil penalties.

2. Anthony Tyrone Jones, Jr.

An SEC judge barred Jones Jr. from the securities industry inDecember, after he previously pled guilty to wire fraud.

Representing himself as an investment advisor, Jones Jr.convinced a woman to invest $22,000 in McDonalds stock. He used themoney for his “personal enjoyment,” according to administrativecourt documents.

Later, he represented himself as an FBI agent in a separate actof fraud. Arrested for that crime, Jones Jr. made bail, andproceeded to cut of his electronic monitoring bracelet. He remaineda fugitive for two years.

3. Robert Seibert, aka “John Grey”

Seibert, a recidivist thief and felon, raised more than half amillion dollars from over 40 seniors in several states.

He lied about being a broker, promising the seniors they woulddouble their investments. He used the name John Grey to conceal hiscriminal record, and paid for travel and outstanding child supportwith the investors’ assets.

4. Daniel Christian Stanley Powell

In November, an administrative judge sanctioned Powell at thebehest of SEC’s Division of Enforcement. He is barred fromassociating with any broker-dealer, investment advisor, orsecurities dealer.

From 2006 to 2011, he was the CEO of a broker-dealer he founded.In 2009 he launched a separate real estate investment company,offering lucrative opportunities in gold and coal assets.

Powell told investors that their cash would return 15 percent,and that their investments were backed by life insurance policies.He used independent contractors to solicit investors, payingcommissions up to 5 percent of invested assets.

He would rake in over $5 million in investors’ funds, paying outabout $90,000 in returns. Powell rifled through the remaining cashin a two-year period.

In 2014, a federal court in California convicted Powell on 13counts. He was sentenced to 121 months in prison, and ordered topay $4.4 million in restitution.

5. Aegis Capital and Circle One Wealth Management

These two registered investment advisories were owned by thesame parent company. Both “grossly” overestimated assets undermanagement and the number of clients they served in ADVfilings.

“Violating one’s fiduciary duty by falsely reporting informationthat any reasonable investor would find material—claiming to havesignificantly more assets under management than was actually thecase—alone makes Respondents’ conduct egregious,” wrote an SECadministrative judge in November of 2016.

Circle One is no longer in business. The SEC judge censuredAegis.