In a pivotal moment backed by pro-XRP lawyer John E Deaton’s sentiments, high-profile entrepreneurs Elon Musk and Mark Cuban, along with a consortium of prominent investors, have raised objections against the US Securities and Exchange Commission (SEC). This challenge comes in the form of an amicus curiae brief addressing the SEC’s litigation procedures.
Elon Musk and Mark Cuban’s Amicus Brief
Musk, Cuban, and other amici such as Phillip Goldstein, Nelson Obus, Manouch Moshayedi, and the Investor Choice Advocates Network (ICAN) collectively argue against the SEC’s predominant use of administrative proceedings over jury trials. The brief highlights that this method raises questions about the constitutionality of the SEC’s practices.
The amicus brief was composed for the SEC v. Jarkesy case. Here, George Jarkesy, the complainant, alleges that his Seventh Amendment privileges were infringed upon. He argues that the SEC’s internal adjudication method, which lacks a jury and is overseen by a commission-designated administrative law judge, violates these privileges.
Drawing attention to the Seventh Amendment, which upholds a defendant’s right to a jury trial for cases mirroring “suits at common law,” the amici underline the SEC’s inconsistency. They cite the SEC v. Seghers case as an example, where the SEC opted for a jury trial, resulting in a liability verdict against Seghers for fraud.
The amici also address concerns of “forum shopping” by the SEC, suggesting that the agency might prosecute two identical defendants differently. This approach could result in one party benefiting from full constitutional rights, while the other might not, leading to a disparate legal outcome.
The document reads:
Forum shopping by itself may not be impermissible. But forum shopping by the federal government to pursue the same claims and penalties against similarly situated individuals, so that one individual has access to a jury and the other does not, violates the Equal Protection Clause of the Constitution.
The document further contends that such practices damage the SEC’s credibility at a time when public trust in such institutions is waning, intensified by revelations of the SEC’s “improper access to privileged memoranda.”
The amici conclude that the SEC’s practices deprive the public of critical information that might come to light during a jury trial, which contradicts the SEC’s core mission. This shared…
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