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‘Enforcement 40’ for 2020
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Join the Securities Litigation and Enforcement Group on LinkedInThe SEC Has the Power to Save Itself From Constitutional Doubts
Jarkesy doesn’t have to create a sea of change. There’s an easy fix: Congress, the SEC, or even the Supreme Court itself could avoid major disruption in administrative enforcement and adjudication by recognizing a “right to remove.” A regulated party should have a right to remove an SEC enforcement action for civil penalties from an […]
SEC’s Use of In-House Judges Cast in Doubt by Supreme Court
The US Supreme Court’s conservative majority cast doubt on the Securities and Exchange Commission’s use of in-house judges, hearing arguments in a case that could strip the agency of a key enforcement tool. In a session that lasted more than two hours Wednesday, the justices suggested that people accused of fraud by the SEC have […]
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 […]
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 […]
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 […]
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 […]
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. […]
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 […]
SEC Defends Administrative Judges in Initial Supreme Court Brief
Administrative law judges should be able to adjudicate enforcement proceedings in which the government seeks civil penalties for securities violations, the Securities and Exchange Commission said in its opening brief before the US Supreme Court. The Fifth Circuit’s ruling against the use of ALJs rests on a misunderstanding of legislative power, and Congress didn’t violate […]
SEC Calls In-House Judge Challenge Moot After It Dropped Case
An investment adviser’s second lawsuit challenging the SEC’s in-house judges on constitutional grounds should be dismissed as moot, the agency said Monday, citing a mix-up that led it to toss dozens of internal cases. The Securities and Exchange Commission’s enforcement case against Christopher Gibson was among those affected by a database issue that failed to […]