The constitutional spotlight is shining on the U.S. Securities and Exchange Commission. In the last several weeks, the U.S. Supreme Court agreed to hear a case seeking broader federal jurisdiction for constitutional challenges, the U.S. Court of Appeals for the Fifth Circuit found multiple constitutional infirmities in SEC practice and procedures, and a petition for certiorari was filed seeking to end the SEC’s longstanding “gag order” requirement for settlements. Three cases — Cochran, Jarkesy and Romeril — represent three unique challenges to SEC practices. Here are some takeaways on what to look for next.
Implications of Jarkesy v. SEC: Fifth Circuit Upholds Right to Jury Trial, Raises Red Flags about Administrative State
The federal Fifth Circuit’s opinion vacating a Securities and Exchange Commission administrative law judge’s decision in a securities fraud case is the first time since 1935 that the court used Article I’s nondelegation doctrine to invalidate congressional delegation to an agency and could drastically affect the use of in-house administrative judges. While the court did not directly attack agencies’ ability to legislate, the opinion’s broad sweeping language about separation of powers and accountability suggests that agency rulemaking authority could be ripe for challenge. Cases involving securities fraud, Medicare, disability benefits, immigration and more could sit on dockets for years waiting to be adjudicated. This article is the first in a series examining the federal appellate court’s decision in Jarkesy.
Lessons from the Boeing 737 MAX Criminal Trial
When two Boeing 737 MAX jets crashed five months apart, Congress, the media and the U.S. Department of Justice looked for someone to blame. David Gerger represented the only person criminally charged in the scandal. He reflects on his client’s swift acquittal by the jury.
DBJ: Prison Sentences Handed Down for UDF Execs
Coming into the hearing, four UDF executives faced sentences of up to 27 years in federal prison, according to prosecutors.
Nationwide Permit 12 in the Crosshairs (Again), and Texas Energy and Infrastructure Projects Hang in the Balance
The Edison Electric Institute, which represents investor-owned electric companies, recently warned that environmentalists’ challenge to a Clean Water Act dredge-and-fill general permit for oil and gas pipelines is not just a threat to efficient permitting for those projects but could hinder the validity of similar permits for other sectors.
The court’s holding in the underlying case challenging the nationwide permit has the potential to significantly impact energy sector projects in Texas.
DBJ: Prosecutors Get More Time to Tally Restitution in UDF Fraud Case
Federal prosecutors say that roughly 30,000 investors are victims of the UDF executives under the Crime Victims Rights Act. Sentencing is set for May 20.