Nofziger Previews Regulatory Impacts Of SCOTUS Jarkesy Case

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Dustin Nofziger, a member of Pryor Cashman's Financial Institutions Group, wrote an article for Bloomberg Law about the upcoming U.S. Supreme Court case Securities & Exchange Commission v. Jarkesy...
United States Litigation, Mediation & Arbitration
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Dustin Nofziger, a member of Pryor Cashman's Financial Institutions Group, wrote an article for Bloomberg Law about the upcoming U.S. Supreme Court case Securities & Exchange Commission v. Jarkesy, which is set to impact several regulatory agencies.

In "SEC v. Jarkesy's Implications for the FDIC & Other Prudential Banking Regulators," Dustin notes that the Court's decision later in the term "could have significant implications for the Federal Deposit Insurance Corporation (FDIC) and the other federal prudential banking regulators, namely the Board of Governors of the Federal Reserve System (FRB), Office of the Comptroller of the Currency (OCC), and National Credit Union Administration (NCUA)."

Dustin explains the case's background and appellate path to SCOTUS, and details key elements of the oral arguments held before the Court in November 2023. He then previews potential implications for regulators:

It is unclear that a Supreme Court holding that Jarkesy was entitled to a jury will impact the FDIC and the other federal prudential banking regulators. And because, unlike the SEC and the Consumer Financial Protection Bureau (CFPB), the prudential banking regulators do not have the option to bring enforcement actions in federal court, a holding that Congress unconstitutionally delegated legislative power to the SEC when it gave the SEC the unfettered statutory authority to choose where to bring an enforcement action is unlikely to impact them.

On the other hand, a holding that the SEC's ALJs are insufficiently accountable to the President under the Take Care Clause may be extremely consequential for the prudential banking regulators, as it would likely mean that their ALJs also are unconstitutional.

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