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The Supreme Court strips the SEC of a critical enforcement tool in fraud cases
Court Watch |
2024/07/02 10:30
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The Supreme Court on Thursday stripped the Securities and Exchange Commission of a major tool in fighting securities fraud in a decision that also could have far-reaching effects on other regulatory agencies.
The justices ruled in a 6-3 vote that people accused of fraud by the SEC, which regulates securities markets, have the right to a jury trial in federal court. The in-house proceedings the SEC has used in some civil fraud complaints, including against Houston hedge fund manager George Jarkesy, violate the Constitution, the court said.
“A defendant facing a fraud suit has the right to be tried by a jury of his peers before a neutral adjudicator,” Chief Justice John Roberts wrote for the court’s conservative majority.
Justice Sonia Sotomayor, who read from her dissent in the courtroom, said that “litigants who seek to dismantle the administrative state” would rejoice in the decision.
Federal agencies that oversee safety in mines and other workplaces are among many that can only impose civil penalties in in-house, administrative proceedings, Sotomayor wrote, joined by Justices Ketanji Brown Jackson and Elena Kagan.
“For those and countless other agencies, all the majority can say is tough luck; get a new statute from Congress,” she wrote.
The case is among several this term in which conservative and business interests are urging the nine-member court to constrict federal regulators. The court’s six conservatives already have done so, including in a decision last year that sharply limited environmental regulators’ ability to police water pollution in wetlands.
Still awaiting decision are cases calling on the court to overturn the 40-year-old ruling colloquially known as Chevron, which has made it easier to sustain regulation of the environment, public, health, worker safety and consumer protection. Some of the same parties that supported Jarkesy at the Supreme Court are calling for Chevron to be overturned.
The SEC was awarded more than $5 billion in civil penalties in the 2023 government spending year that ended Sept. 30, the agency said in a news release. It was unclear how much of that money came through in-house proceedings or lawsuits in federal court.
The agency had already reduced the number of cases it brings in administrative proceedings pending the Supreme Court’s resolution of the case.
The high court rejected arguments advanced by President Joe Biden’s Democratic administration that relied on a 50-year-old decision in which the court ruled that in-house proceedings did not violate the Constitution’s right to a jury trial in civil lawsuits.
The justices ruled in favor of Jarkesy after the SEC appealed a decision in which the New Orleans-based 5th U.S. Circuit Court of Appeals threw out stiff financial penalties against Jarkesy and his Patriot28 investment adviser.
The appeals court found that the SEC’s case against Jarkesy, resulting in a $300,000 civil fine and the repayment of $680,000 in allegedly ill-gotten gains, should have been heard in a federal court instead of before one of the SEC’s administrative law judges. |
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Supreme Court will take up state bans on gender-affirming care for minors
Court Watch |
2024/06/24 15:22
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The Supreme Court on Monday jumped into the fight over transgender rights, agreeing to hear an appeal from the Biden administration seeking to block state bans on gender-affirming care.
The justices’ action comes as Republican-led states have enacted a variety of restrictions on health care for transgender people, school sports participation, bathroom usage and drag shows. The administration and Democratic-led states have extended protections for transgender people, including a new federal regulation that seeks to protect transgender students.
The case before the high court involves a law in Tennessee that restrict puberty blockers and hormone therapy for transgender minors. The federal appeals court in Cincinnati allowed laws in Tennessee and Kentucky to take effect after they had been blocked by lower courts. (The high court did not act on a separate appeal from Kentucky.)
“Without this Court’s prompt intervention, transgender youth and their families will remain in limbo, uncertain of whether and where they can access needed medical care,” lawyers for the transgender teens in Tennessee told the justices.
Actor Elliot Page, the Oscar-nominated star of “Juno,” “Inception” and “The Umbrella Academy,” was among 57 transgender people who joined a legal filing in support of Supreme Court review.
Arguments will take place in the fall. Last month, South Carolina became the 25th state to adopt a law restricting or banning gender-affirming medical care for transgender minors, even though such treatments have been available in the United States for more than a decade and are endorsed by major medical associations.
Most of the state restrictions face lawsuits. The justices had previously allowed Idaho to generally enforce its restrictions, after they had been blocked by lower courts.
At least 24 states have laws barring transgender women and girls from competing in certain women’s or girls’ sports competitions. At least 11 states have adopted laws barring transgender girls and women from girls’ and women’s bathrooms at public schools, and in some cases other government facilities. |
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Trump's lawyers ask judge to lift gag order imposed during New York trial
Court Watch |
2024/06/10 12:23
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Donald Trump’s lawyers are asking a New York judge to lift the gag order that barred the former president from commenting about witnesses, jurors and others tied to the criminal case that led to his conviction for falsifying records to cover up a potential sex scandal.
In a letter Tuesday, Trump lawyers Todd Blanche and Emil Bove asked Judge Juan M. Merchan to end the gag order, arguing there is nothing to justify “continued restrictions on the First Amendment rights of President Trump” now that the trial is over.
Among other reasons, the lawyers said Trump is entitled to “unrestrained campaign advocacy” in light of President Joe Biden’s public comments about the verdict last Friday, and continued public criticism of him by his ex-lawyer Michael Cohen and porn actor Stormy Daniels, both key prosecution witnesses.
Trump’s lawyers also contend the gag order must go away so he’s free to fully address the case and his conviction with the first presidential debate scheduled for June 27.
The Manhattan district attorney’s office declined to comment.
Merchan issued Trump’s gag order on March 26, a few weeks before the start of the trial, after prosecutors raised concerns about the presumptive Republican presidential nominee’s propensity to attack people involved in his cases.
Merchan later expanded it to prohibit comments about his own family after Trump made social media posts attacking the judge’s daughter, a Democratic political consultant. Comments about Merchan and District Attorney Alvin Bragg are allowed, but the gag order bars statements about court staff and members of Bragg’s prosecution team.
Trump was convicted Thursday of 34 counts of falsifying business records arising from what prosecutors said was an attempt to cover up a hush money payment to Daniels just before the 2016 election. She claims she had a sexual encounter with Trump a decade earlier, which he denies. He is scheduled to be sentenced July 11.
Prosecutors had said they wanted the gag order to “protect the integrity of this criminal proceeding and avoid prejudice to the jury.” In the order, Merchan noted prosecutors had sought the restrictions “for the duration of the trial.” He did not specify when they would be lifted.
Blanche told the Associated Press last Friday that it was his understanding the gag order would expire when the trial ended and that he would seek clarity from Merchan, which he did on Tuesday. |
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Supreme Court rejects appeal from Black Lives Matter activist
Court Watch |
2024/04/18 11:50
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The Supreme Court on Wednesday made it easier for workers who are transferred from one job to another against their will to pursue job discrimination claims under federal civil rights law, even when they are not demoted or docked pay.
Workers only have to show that the transfer resulted in some, but not necessarily significant, harm to prove their claims, Justice Elena Kagan wrote for the court.
The justices unanimously revived a sex discrimination lawsuit filed by a St. Louis police sergeant after she was forcibly transferred, but retained her rank and pay.
Sgt. Jaytonya Muldrow had worked for nine years in a plainclothes position in the department’s intelligence division before a new commander reassigned her to a uniformed position in which she supervised patrol officers. The new commander wanted a male officer in the intelligence job and sometimes called Muldrow “Mrs.” instead of “sergeant,” Kagan wrote.
Muldrow sued under Title VII of the Civil Rights Act of 1964, which prohibits workplace discrimination on the basis of race, sex, religion and national origin. Lower courts had dismissed Muldrow’s claim, concluding that she had not suffered a significant job disadvantage.
“Today, we disapprove that approach,” Kagan wrote. “Although an employee must show some harm from a forced transfer to prevail in a Title VII suit, she need not show that the injury satisfies a significance test.”
Kagan noted that many cases will come out differently under the lower bar the Supreme Court adopted Wednesday. She pointed to cases in which people lost discrimination suits, including those of an engineer whose new job site was a 14-by-22-foot wind tunnel, a shipping worker reassigned to exclusively nighttime work and a school principal who was forced into a new administrative role that was not based in a school.
Although the outcome was unanimous, Justices Samuel Alito, Brett Kavanaugh and Clarence Thomas each wrote separate opinions noting some level of disagreement with the majority’s rationale in ruling for Muldrow.
Madeline Meth, a lawyer for Muldrow, said her client will be thrilled with the outcome. Meth, who teaches at Boston University’s law school, said the decision is a big win for workers because the court made “clear that employers can’t decide the who, what, when, where and why of a job based on race and gender.”
The decision revives Muldrow’s lawsuit, which now returns to lower courts. Muldrow contends that, because of sex discrimination, she was moved to a less prestigious job, which was primarily administrative and often required weekend work, and she lost her take-home city car. |
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Alabama woman who faked kidnapping pleads guilty to false reporting
Court Watch |
2024/03/22 10:41
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An Alabama woman who claimed she was abducted after stopping her car to check on a wandering toddler pleaded guilty on Thursday to charges of giving false information to law enforcement.
News outlets reported that Carlee Russell pleaded guilty to misdemeanor charges of false reporting to law enforcement and falsely reporting an incident. She was given a suspended six-month sentence which will allow her to avoid jail. She was ordered to pay more than $17,000 restitution.
Her two-day disappearance, and her story of being abducted alongside an interstate highway, captivated the nation before police called her story a hoax.
Russell, accompanied to court by her family and defense lawyers, apologized for her actions.
“I want to genuinely apologize for my actions. I made a grave mistake while trying to fight through various emotional issues and stress. I’m extremely remorseful for the panic, fear and various range of negative emotions that were experienced across the nation,” Russell said according to WBRC.
Russell disappeared July 13 after calling 911 to report a toddler beside a stretch of Interstate 459 in the Birmingham suburb of Hoover. She returned home two days later and told police she had been abducted and forced into a vehicle.
Police quickly cast doubt on Russell’s story. Her attorney issued a statement through police acknowledging there was no kidnapping and that she never saw a toddler. In the statement, Russell apologized to law enforcement and the volunteers who searched for her.
The Alabama attorney general’s office had argued that Russell should spend time in jail because of the time and energy that law enforcement spent in looking for her.
Jefferson County Circuit Judge David Carpenter told Russell that while her actions caused panic and disruption in the community that it would be a “waste of resources” to put her in jail for misdemeanors, news outlets reported.
Katherine Robertson, Chief Counsel in the Alabama attorney general’s office, said Thursday that they “are disappointed, but not surprised” that Russell did not get the requested jail time. |
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Investment Fraud Litigation |
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Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws. Securities Arbitration. Generally speaking, securities fraud consists of deceptive practices in the stock and commodity markets, and occurs when investors are enticed to part with their money based on untrue statements.
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The content contained on the web site has been prepared by Securities Law News as a service to the internet community and is not intended to constitute legal advice or a substitute for consultation with a licensed legal professional in a particular case. | Affordable Law Firm Website Design by Law Promo |
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