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Bailey McCann, Opalesque New York:

In March, the SEC brought fraud charges against distressed maven Lynn Tilton and her firm Patriarch Partners. According to the complaint, Tilton and her firm stand accused of hiding the poor performance of loan assets in three collateralized loan obligation (CLO) funds they manage. Since then, Tilton has mounted a multi-faceted defense against the charges including filing suit against the SEC, saying that the in-house administrative court commonly used by the SEC was an unfair venue. A judge dismissed the suit, which could allow an administrative court proceeding to move forward.

The rulling, made by U.S. District Judge Ronnie Abrams in Manhattan today said that Tilton and her firm lacked the power to block the SEC from pursuing its case against her irrespective of venue.

Tilton's suit is part of a growing chorus coming from accused fund managers that claim that the SEC's admninistrative court is inherently unfair. Earlier this month, it seemed that the courts momentarily agreed after U.S. District Judge Leigh Martin May said in a ruling for another SEC case that administrative court proceedings may violate the constitution. That ruling was promptly rejected by the US government. Acc......................

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