Securities Regulation Daily Wrap Up, SEC NEWS AND SPEECHES—Fed. Cir.: MSPB order that affirmed suspension of SEC employee upheld in nonprecedential opinion, (Feb 10, 2026)

By Rebecca E. Hoffman, J.D.

The court disagreed that the employee’s suspension and reassignment were a “unified penalty,” and thus the Board was correct in not exercising jurisdiction over the SEC’s reassignment.

A former SEC personnel security specialist, who was suspended and then reinstated but assigned elsewhere in the agency, failed to convince the Federal Circuit to find error in the Merit Systems Protection Board’s (MSPB) refusal to amend an order that adopted a decision indefinitely suspending her (Gibson v. SEC, No. 2024-1484 (Fed. Cir. Feb. 6, 2026)).

After the petitioner was hired, the SEC discovered that she had made some misstatements and omissions during the hiring process. Her Top-Secret security clearance, and ultimately her employment, was suspended. Several months later, the SEC reinstated her security clearance and employment but reassigned her as a management program analyst, the court said. The petitioner attempted to challenge this reassignment through an amendment to her MSRB appeal from the indefinite suspension. Her request to amend was denied for lack of Board jurisdiction.

The Board affirmed the indefinite suspension, and the petitioner sought review of the final order. The court explained that the Board does not typically have jurisdiction over a reassignment where the employee is not subject to a pay cut or demotion. “[T]he only way for the Board to exercise jurisdiction over [the petitioner’s] reassignment is if her reassignment and indefinite suspension constituted ‘a unified penalty arising out of the set of circumstances of which [she] was found culpable,’” the court said, citing Brewer v. American Battle Monuments Commission, 779 F.2d 663, 664 (Fed. Cir. 1985).

The suspension was based on the petitioner’s lack of security clearance, but the reassignment came about because, during the investigation regarding the suspension, she made questionable statements, such as statements that conflicted with what her supervisor said. The court found that the Board did not commit reversible error by finding there was no unified penalty.

The case is No. 2024-1484.

Judge: Cunningham, T.

Attorneys: Peter Broida (Law Office of Peter B. Broida) for Stefani Gibson. Amanda Tantum for the SEC.

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