Accused Assisted Living Concepts CEO sues government agency over use of 'in-house' court

The former chief executive of an assisted living provider has sued the Securities and Exchange Commission, arguing against its practice of bringing cases before an “in-house” court, Reuters reported Monday.

Last month, the SEC filed a suit against former Assisted Living Concepts CEO Laurie Bebo. It alleged that Bebo and Chief Financial Officer John Buono inflated occupancy figures and released false financial statements.

Bebo has countered by bringing a suit against the SEC, according to Reuters. Bebo's Jan. 2 complaint focuses on the SEC's use of administrative proceedings, under which defendants first must go before an SEC judge before a case is eligible for federal court. Defendants are more limited in the SEC venue — for example, they are unable to take depositions and have less time to review evidence.

The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act expanded the SEC's use of these administrative proceedings. Since then, other defendants have mounted similar challenges as Bebo's, but they have not succeeded in getting the venue changed, Reuters noted.