The Commission instituted disciplinary proceedings against CPA Shovers under its rule 102(e) and temporarily suspended him from practicing before the Commission at the same time. Rule 102(e)(3) allows temporary suspensions pending a hearing on the merits if the respondent has been enjoined from securities law violations or found to have violated the securities laws in a Commission enforcement action. Shovers was enjoined in late 2008 after a jury in a Commission civil action found he had violated, inter alia, the antifraud provisions of the securities laws.
Shovers moved that the temporary suspension be lifted until the Commission had decided the case on the merits and also moved for a hearing. The Commission denied the motion to lift the temporary suspension noting that Shovers may not collaterally attack the injunction or findings in the civil case. Shovers' request for a hearing was granted and ordered that an expedited hearing take place before an administrative law judge.
In a footnote the Commission noted that it would presume that Shavers was not prejudiced by the temporary suspension pending the hearing as he did not allege any harm. Practitioners should note this and be prepared to argue harm resulting from such a suspension if they seek relief from the stay pending a hearing.