In the Headlines
April 14, 2023

Securities Experts React to the High Court's SEC Decision


Securities Enforcement Defense attorney Scott Mascianica spoke with Law360 about a recent U.S. Supreme Court decision greenlighting a lawsuit challenging the constitutionality of the U.S. Securities and Exchange Commission's (SEC) in-house proceedings. The ruling in SEC v. Cochran concluded that certified public accountant Michelle Cochran could continue to pursue her constitutional challenges against the agency in federal court, even though she hasn't gone through the traditional appeal process mandated by Congress. Mr. Mascianica spoke about the possible impact this ruling could have on the agency's enforcement division, which oversees SEC litigation.

"The Supreme Court has made clear that the constitutionality of proceedings is a 'here-and-now injury' so the ultimate decision to align with the Fifth Circuit on the limits of 78y [the statute that served as the basis for the SEC's argument that Cochran couldn't go to a district court to assert her constitutional challenge] in circumstances like this one is not surprising," he said. "The most interesting aspect [is] Justice Thomas' concurrence, which may foreshadow how certain members of the court will lean going forward on other constitutional challenges to administrative proceedings regarding distinctions between public and private rights, as well as Seventh Amendment concerns."

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