Jarkesy and the Loss of the SEC's In-House Court Expertise

Jarkesy Case Strips Enforcers of In-House Court Expertise, Speed

These actions also will likely fall to juries. With the utmost respect to the average US juror, most don’t understand the complexities of federal securities laws.

Take, for example, the case filed against Elon Musk for market manipulation in 2018, when he claimed he had secured the funding to take Tesla private. The SEC filed a complaint in federal court, not with an ALJ, alleging Musk’s statements violated Rule 10b-5 of the Securities Exchange Act covering “employment of manipulative and deceptive devices.”

The parties settled, Musk paid $20 million in fines, and he stepped down as chairman of Tesla. Following the settlement, shareholders filed a class action with the same facts and under the same rule: Rule 10b-5. This time, Musk took it to trial, where a jury found him not liable for the same statements for which he’d just paid a $20 million fine. This illustrates how getting ordinary jurors to understand the complexities of federal securities laws is a more onerous task than the Supreme Court may believe.

Donald Trump’s Official Republican Platform Pledges to Halt Crypto ‘Crackdown’ in U.S.

Former President Donald Trump’s Republican Party has officially adopted a platform that would seek to support cryptocurrency innovation, according to the document released Monday by the Republican National Committee.

The platform is meant to lay out the party’s priorities as presumptive presidential nominee Trump and Republican congressional candidates head into the November election, and it reflects Trump and other GOP politicians’ rising interest in digital assets.

“Republicans will end Democrats’ unlawful and unAmerican Crypto crackdown and oppose the creation of a Central Bank Digital Currency,” according to the document. “We will defend the right to mine Bitcoin, and ensure every American has the right to self-custody of their Digital Assets, and transact free from Government Surveillance and Control.”

After ‘Chevron’ deference, “respect”: ‘Loper Bright’ and agency policymaking

From deference to respect

What replaces Chevron deference is for “courts to do their ordinary job” of determining the “best reading” of the statute using all the traditional tools of statutory interpretation at their disposal. “Due respect” to an agency’s view remains one such tool.

Reviewing courts should look to pre-Chevron approaches to agency cases, especially the Supreme Court’s 1944 opinion Skidmore v. Swift & Co., which instructed courts to consider the thoroughness, reasoning, and consistency of an agency’s view and “all those factors which give it power to persuade, if lacking power to control.”

SEC Tipsters’ Court Appeal Carries More Weight With Chevron Dead

A federal court appeal by two whistleblowers who helped the Securities and Exchange Commission recover $1 billion for defrauded investors, only to be blocked from collecting what would have been a record award, now shapes up as a test of the program’s future thanks to the Supreme Court.

The timing couldn’t be better for forensic accountant John McPherson and investor John Barr to argue Tuesday before the US Court of Appeals for the Fifth Circuit. Less than two weeks ago, the Supreme Court overturned the Chevron doctrine, which required judges to defer to an agency’s reasonable interpretation of statutes that are ambiguous or not clearly defined.

McPherson and Barr are in line for a potential $250 million payout if they can prove the SEC made up rules to avoid paying them one of the largest bounties in the program’s 13-year history….

Targeting white-collar crime, Justice Dept. seeks more whistleblowers

Officials said they are modeling the new program after similar ones in two other federal agencies, the Securities and Exchange Commission and the Commodity Futures Trading Commission. The SEC received 18,000 tips in fiscal 2023, up nearly 50 percent from a year earlier, and paid a record $600 million to 68 whistleblowers. The CFTC received 1,530 tips and paid seven whistleblowers a total of $16 million last year.

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Justice officials said the initiative aims to fill enforcement gaps in areas where the other federal agencies lack legal jurisdiction. They cited foreign money-laundering operations that entangle American institutions, bribery of government employees and abuses of the U.S. financial system by non-publicly traded companies out of the SEC’s reach.

Under the guidelines, officials said, whistleblowers will be eligible for cash rewards provided they have not been involved in the alleged misconduct and their information helps lead to a conviction of a minimum settlement amount. That figure has yet to be announced. A similar requirement at the SEC puts the bar at cases that result in settlements of $1 million or greater.

SEC Files Settled Charges Based on Alleged Cybersecurity-Related Control Deficiencies

In any event, well-advised companies seeking to avoid similar conflicts with the agency and trying to maintain adequate and appropriate cybersecurity reporting processes and procedures will want to review the agency’s cease and desist order carefully. In describing the ways in which the agency contends that RRD’s controls were inadequate, the agency inferentially suggests ways that companies’ internal reporting procedures can be improved in order to ensure that incident alerts are elevated and acted upon appropriately.

Whatever else you want to say about the circumstances involved here, there was a lag between the time of the initial alert and the point at which the company responded to the intrusion, and it was during this lag that the data exfiltration took place. Regardless of any question about a possible SEC enforcement action, all companies seeking to protect their data and assets from this kind of intrusion will want to try to take steps to ensure that this kind of lag does not occur in their operations.