On June 04, 2020, the Supreme Court heard a case concerning the power of the Securities and Exchange Commission (SEC) to bring enforcement actions in its own administrative tribunals rather than going to the regular federal courts.
The case before the court was critical for determining the scope of the SEC’s authority. The five conservative justices, who comprise the majority of the court, seemed to be expressing significant doubts about the agency’s ability to bring such actions.
The case concerned the SEC’s power to bring enforcement actions against Raymond Lucia, a California financial advisor, for alleged violations of an anti-fraud rule. He claimed that the SEC lacked the power to bring the case in its own tribunals.
Justice Brett Kavanaugh was the most vocal in his opposition to the idea that the SEC should be able to bring cases in-house. He pointed out that for more than 80 years, the federal courts have been the sole venue for such cases. He argued that changing that would be a significant expansion of the SEC’s power that could lead to unequal protection of investors and challenge the separation of powers.
Justice Samuel Alito echoed Kavanaugh’s concerns and added that it was unclear which laws would give the SEC the authority to bring such actions. He also expressed worry about having unelected SEC-appointed judges deciding cases.
Justice Neil Gorsuch, the court’s newest member, suggested that the court should look at the language of the relevant statute to determine if the SEC has the power to bring actions. Justice Clarence Thomas, who rarely speaks during court sessions, remained silent on the issue.
The court’s decision will likely be issued by the end of June. Regardless of the outcome, it is clear that the conservative majority of the court is dubious of the SEC’s power to bring enforcement actions in-house. This could lead to significant changes in how the agency operates and could have a lasting impact on investor protection.
On June 04, 2020, the Supreme Court heard a case concerning the power of the Securities and Exchange Commission (SEC) to bring enforcement actions in its own administrative tribunals rather than going to the regular federal courts.
The case before the court was critical for determining the scope of the SEC’s authority. The five conservative justices, who comprise the majority of the court, seemed to be expressing significant doubts about the agency’s ability to bring such actions.
The case concerned the SEC’s power to bring enforcement actions against Raymond Lucia, a California financial advisor, for alleged violations of an anti-fraud rule. He claimed that the SEC lacked the power to bring the case in its own tribunals.
Justice Brett Kavanaugh was the most vocal in his opposition to the idea that the SEC should be able to bring cases in-house. He pointed out that for more than 80 years, the federal courts have been the sole venue for such cases. He argued that changing that would be a significant expansion of the SEC’s power that could lead to unequal protection of investors and challenge the separation of powers.
Justice Samuel Alito echoed Kavanaugh’s concerns and added that it was unclear which laws would give the SEC the authority to bring such actions. He also expressed worry about having unelected SEC-appointed judges deciding cases.
Justice Neil Gorsuch, the court’s newest member, suggested that the court should look at the language of the relevant statute to determine if the SEC has the power to bring actions. Justice Clarence Thomas, who rarely speaks during court sessions, remained silent on the issue.
The court’s decision will likely be issued by the end of June. Regardless of the outcome, it is clear that the conservative majority of the court is dubious of the SEC’s power to bring enforcement actions in-house. This could lead to significant changes in how the agency operates and could have a lasting impact on investor protection.
