- The Delaware Supreme Court has affirmed a lower court’s ruling in Swan Energy, Inc., Brandon Davis, John Schiffner, and Cody Davis v. Investor Protection Unit of Delaware Department of Justice dismissing constitutional challenges to the Delaware Department of Justice’s administrative process for enforcing alleged violations.
- The Delaware Investor Protection Unit (Unit) of the Delaware Department of Justice initiated an administrative enforcement action in 2020 against Swan Energy, Inc. and four individuals alleging that the respondents operated a long running scheme to induce investors to purchase risky, unregistered oil, gas, and mining securities.
- Years into the proceeding, the plaintiffs filed a separate court action seeking a declaration that the Unit’s administrative proceeding violated their constitutional rights to a jury trial and due process. The Superior Court dismissed their lawsuit, and the Delaware Supreme Court has now affirmed that dismissal, concluding that the Delaware Securities Act’s administrative enforcement framework is constitutional and does not violate jury trial or due process rights.