Tag: ALJs

Legal Threats to Wall Street’s Self-Regulators May Upend Markets

Looming circuit court rulings on the constitutionality of FINRA and other Wall Street self-regulatory groups have attorneys and law professors concerned about a potential shock to the American securities trading system if the bodies that police the market are rendered powerless. The clashes over those self-regulatory organizations, some little known outside the financial industry, are playing out in the shadow…

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The SEC’s in-house administrative adjudications docket

As we eagerly await a decision by The Supreme Court of the United States in the Jarkesy case, the U.S. Securities and Exchange Commission just released this latest edition of its twice-yearly report on the status of the agency’s in-house administrative adjudications docket. The report conclusively refutes those fearmongers who insist the sky will fall if the Court affirms the…

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The SEC May Have Gone Too Far. The Supreme Court Shouldn’t. – Bloomberg

It’s worth pondering the practical implications of such a ruling. Would the SEC be able to protect investors and regulate securities markets if it had to bring its cases to district court? Undoubtedly. But throwing out the intelligible-principle test would cast doubt on existing regulations — as many as hundreds of thousands across the government — and create difficult new…

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The SEC Might Lose Its Courts – Bloomberg

But if Jarkesy wins a total victory on the nondelegation argument, that’s different. That could mean that all of the SEC’s rulemaking (and every other regulatory agency’s rulemaking) is suspect, that every policy decision that the SEC makes is unconstitutional. Much of US securities law would need to be thrown out, or perhaps rewritten by Congress if they ever got…

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How the SEC (or Maybe Even the Supreme Court) Could Save Agency Adjudication in SEC v. Jarkesy – Yale Journal on Regulation

On Wednesday, the Supreme Court will hear oral argument in SEC v. Jarkesy, a major constitutional challenge to the future of agency adjudication and enforcement. In an essay forthcoming in the Ohio State Law Journal, David Zaring and I set forth a way for the SEC, Congress, or maybe even the Supreme Court could save agency adjudication. In particular, we…

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SEC administrative enforcement process called into question, highlighting importance of private actions | Reuters

The Supreme Court took the case and is scheduled to hear oral argument on Nov. 29, 2023. Over 35 amici have filed briefs weighing in on these issues. Groups of administrative law scholars and the American Bar Association filed briefs in support of the SEC; meanwhile, attorneys general from 18 states, along with high-profile individuals like Mark Cuban and Elon…

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SEC Enforcement Chief: Pending Supreme Court Case on In-House Proceedings Will Not Pause Charges Against Accountants

The Securities and Exchange Commission (SEC) will not hesitate to file charges against accountants and auditors in district courts instead of using in-house administrative proceedings, said the agency’s Enforcement Director Gurbir Grewal at a conference on Oct. 25, 2023. This comes as the commission is locked in a battle in a Supreme Court case—SEC v. Jarkesy—about the constitutionality of the…

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SEC Judges Shouldn’t Decide Securities Fraud Suits, Adviser Says

Administrative law judges appointed by regulators are unfit to preside over securities fraud actions that seek penalties from defendants, which require a jury trial under the Constitution, a hedge fund manager said to the US Supreme Court. Allowing the Securities and Exchange Commission to use administrative tribunals instead of giving defendants an opportunity to face fraud allegations in federal court…

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