One must surely ask, then, what exactly the "executive branch" is supposed to "execute," and how. Using a corporation as a example, the CEO is expected to implement directives from the Board of Directors who have been elected by the stockholders. The Board is not responsible for implementation, the CEO is.
One must surely ask, then, what exactly the "executive branch" is supposed to "execute," and how. Using a corporation as a example, the CEO is expected to implement directives from the Board of Directors who have been elected by the stockholders. The Board is not responsible for implementation, the CEO is.
While some legislation is poorly written, I think it is impossible as well as unwise to try to write all details of implementation into every legislation. The alternatives are placing implementation within Congress, which defies the Constitution, or not implementing any laws that are passed, which makes government by law irrelevant, replacing reason and equality with "might makes right." Fearful news from this decision if it is allowed to stand.
KEM, I am sure you listened carefully to Judge Ketanji Jackson's interview with Congress where the Republican side tried to highlight her "soft on child sexual abuse" sentencing. Nevermind she was within 70% of all like rulings by other judges......
She repeatedly used the specific guidance that was provided in a Congressional law to support her approach. She also repeatedly said that if different or more clear guidance in the law had been available it would have been helpful and she certainly would have followed that guidance.
I think, as an engineer having been thorough and detail oriented (which is work) for my career of successful project outcomes that: IF Congress is going to write a law, the law should detail at some reasonable level what the law is, how it should be enforced, and what breaking that law looks like and what sentencing, at a high level, should be applied.
Then, when everyone in America sees some big crime and fraud like the 2008 Bank Mortgage Fraud crash where nobody went to jail, we don't blame the SEC for doing absolutely nothing.
Instead......
We should blame Congress and the President when a bunch of crooks crash the economy selling a bunch of worthless securities IF there is a law on the books that says that is illegal. If there is no law on the books saying it is illegal to sell, worldwide, a known worthless security, then, well, I won't mind if nobody is arrested. It is legal. Even I can do it.
It is Congress and the President representing our interests (or not as was the case in 2008).
I think it is still legal to sell worthless assets to anyone anywhere in America even today. So, I am not too excited about the SEC since they already appear to me as toothless.
I have the perception that the SEC has never arrested anyone for fraud regarding selling a worthless asset and certainly not in 2008. That could be wrong, but, IF there was clear law on the books, then at least I could be outraged at one of my own representatives and make change: The SEC? I can do nothing to effect change. They all appear to be bought completely off by banks.
Now? Congress points to the SEC. The SEC points to Congress. And Banks? They will sell you anything you are dumb enough to buy.
I don't think your analogy with Justice Jackson is a good parallel.
All that you say could be correct in that an intelligible interest is rather broadly defined as something that is (paraphrased) reasonable, just, in the public interest or necessary. And if fraudulence or violation of these words cannot be proven, then it is not enforceable. In the case you mention, if someone willingly buys something knowing it has no value, that is not fraud. But if a value is represented, then it is.
More to the point, though, that is not the legal principle being attacked by this ruling. This ruling is saying that the executive branch does not have the authority to establish criteria to implement the law, i.e., to determine the intelligible interest. That is a common legislative approach to allow for changes over time, which cause struggles when the world changes such as with the internet bringing up new questions about privacy, etc.
Also Justice Jackson was referring not to definition of a crime, but to the penalty prescribed once a verdict of guilty has been reached. There is a question of specificity: Where a law specifies a penalty, that penalty should be enforced. Where the law does not specify a penalty, or provides a range of penalties, then judicial discretion is allowed to consider other factors. That discretion is what Justice Jackson was referring to.
"This ruling is saying that the executive branch does not have the authority to establish criteria to implement the law".
I will add "through the SEC".
Having added that I will add this: So, here we see the problem. It is so totally legal to sell worthless assets in America, as there is no law against it, that even the FEDERAL RESERVE bought worthless bank assets in 2008 (along with the rest of the world).
This is the problem with the SEC doing the regulating without Congressional laws making what is illegal clear.
The SEC can do nothing without clear laws. Or, alternatively, clear laws make the SEC not needed. Just have the sheriff show up at JP Morgan and arrest Jimmy Dimon and toss him in jail after reading his rights.
Why are we not doing that already? Is it because nobody in Congress has the guts to write such laws? They want to hide behind the SEC?
Sandy, I think special interests have such strong influence on writing legislation that they are able to block substantive reform. Another casualty is the loss of compromise that actually moves towards a goal; it has been replaced by trading favors that do little to improve things other than the enhancement of power. This happens within each party as well as across the aisle. Witness the outsized influence of Manchin...
I think we need to look at the game plan on the right to define everything. All of what you describe that made the legislative body work is irrelevant when the end goal is to destroy the democracy.
Billions of dollars were paid in settlements from litigation over the bond fraud of 2008; at least one person was jailed for falsifying the value of the bonds he sold. The Fed was taken in like everyone else. That speaks more to the cozy relationship that grew like topsy of packaging mortgages with a percentage of tolerance for risky loans . That is no cozier than the relationship between large corporations and Congressional campaigns, or lobbyists and members of Congress. The problem in 2008 is not with who was regulating but that no one was regulating with common sense. If the industry relaxed loan standards to meet investment for formerly red-lined districts or populations, then who should have been watching the percentage of risky loans being packaged and sold? The banks wanted to shed those loans; investors wanted the return on the loans without the hassle of initiating them; etc. So, was analyzing the bonds legislative? No, it was executive. Trust was betrayed.
" The problem in 2008 is not with who was regulating but that no one was regulating with common sense."
OK, I will agree with this sentence, however, with no clear law on the books, written by Congress, the above sentence can be written.
WITH a clear law on the books, the above sentence, I think, would read: Americans watched as our government permitted banks to sell worthless assets illegally and even the government decided to purchase some to shore up their buddies in the banks.
No clear laws enforced by a toothless, powerless SEC KEM?
Count me out of supporting that. I think that, maybe, by disallowing the SEC to make law outside of Congress, it helps to spotlight corruption in Congress when it occurs.
Right now? Congress can point at the SEC. SEC can point at the Congress.
And,? Obama can make a ton of money on bank speeches after 8 years of supporting bailing banks out, without any law sayng that buying those assets is illegal, at the expense of the American people.
I'm glad we agree on something! Whether or not Congress would show any more common sense is debatable, I think. And whether or not they would want to do so, or simply kick the can down the road, is also debatable. But I do wonder if your comments are getting rather far afield of the ruling itself about separation of powers and the feasibility of the concept of intelligible principle. Your comments about Obama certainly are, IMO.
KEM, I appreciated your comments with reference to an understanding of the Jarkesy v. Sec. & Exch. Comm'n decision in finding the SEC ALJs unconstitutional and the effects of this decision. I tend to look to lawyers and other experts in constitutional law to understand a case such as this one. I am curious to know what you think of the following from a member of the Law Professors Blog Network. Of course, all other members of the constitutional law knowledge class, your analysis is called upon. Thank you.
Fifth Circuit Finds SEC ALJs Unconstitutional
'The Fifth Circuit recently decided Jarkesy v. Sec. & Exch. Comm'n, No. 20-61007, 2022 WL 1563613, at *1 (5th Cir. May 18, 2022). The case has significant implications for the SEC's use of administrative law judges (ALJs). The majority opinion was written by Judge Elrod and joined by Judge Oldham. Judge Davis penned a dissent. The majority issued three holdings:'
'We hold that: (1) the SEC's in-house adjudication of Petitioners' case violated their Seventh Amendment right to a jury trial; (2) Congress unconstitutionally delegated legislative power to the SEC by failing to provide an intelligible principle by which the SEC would exercise the delegated power, in violation of Article I's vesting of “all” legislative power in Congress; and (3) statutory removal restrictions on SEC ALJs violate the Take Care Clause of Article II.'
'The case involved two hedge funds founded by Jaresky, an investor, businessman, and conservative radio host. The SEC alleged that Jaresky: (i) misrepresented the identity of the prime broker and auditor; (ii) misrepresented the funds' investment parameters and safeguards; and (iii) overvalued the funds' assets to increase the fees collected. After an evidentiary hearing, an SEC ALJ found that the funds had committed securities fraud. Jaresky's defended by raising constitutional challenges to administrative adjudication, among other things.'
'Although his arguments were rejected by the Commission, the Fifth Circuit embraced them. I'll overview them briefly in turn before turning to broader context and the long term perspective.'
'7th Amendment Right to a Jury Trial'
'The Fifth Circuit concluded administrative adjudication was unconstitutional "because the SEC's enforcement action is akin to traditional actions at law to which the jury-trial right attaches. And Congress, or an agency acting pursuant to congressional authorization, cannot assign the adjudication of such claims to an agency because such claims do not concern public rights alone." As I read the opinion, the Fifth Circuit's seems to find that a right to a jury trial attaches to statutory and administrative claims which significantly overlap with common law claims. This may not be the only reading and I welcome any thoughts in the comments about the scope of this reasoning.'
'There are some immediate implications from this. If applied more broadly, this reasoning might gut much administrative adjudication outside the SEC as well. This holding does not turn on anything unique to the SEC. This would also likely significantly shift enforcement actions to federal court.'
And a PS--how can both "the SEC doesn't have the right to administer this law" and "the [SEC] must take care in the administration of this law" both be true? It seems to me that this combination is a matter of throwing various arguments against the wall to see which one sticks.
Turning over the democratic Rule of Law, which has been underway for sometime and part of the country's history. is one of the primary threats to democracy here. I seek to see this decision put in that context. If and when I find sources and organizations devoted to addressing this area, I will post you and would appreciate sources and contacts you can recommend. Thank you, KEM.
The basic question, I think, is whether agency regulations developed to administer a law constitute "legislative activity" by that agency. Since agencies are under the Executive branch of government, they cannot legislate (the "non delegation" argument espoused by conservatives), that is the job of Congress. The common sense issue is how can agencies *function* without enforcing laws, or, do laws without administration delegated to to an agency have any effect? So the question, such as it is, is whether administration is legislative or executive. I just did a quick search and this seems to be a good explanation. https://ballotpedia.org/Nondelegation_doctrine //.
Since laws without administration or enforcement are useless, that is the threat to democracy. Imagine if the DOJ could not prosecute, for example...Since judicial decisions are supposed to be founded on precedent, application of this doctrine could have a domino effect. It is also interesting to note that even returning to this argument from 80-some years ago is ignoring the precedents set in the last century, and defies one of the major premises of the courtroom. A parallel is the potential over-turning of Roe, which ignores 50 years of accepted Constitutional law.
I am not a lawyer. With many lawyers in the family, I was simply raised to believe that the application of law is a matter of logic and common sense. In this day and age, I would add "and not a matter of personal philosophy or beliefs." I think the question regarding #1 is whether or not fraudulent presentation of a hedge fund's personnel, safeguards, and values is a matter of public interest under the intelligible principle doctrine. I believe that it is, because the offering was made not just to one person, but to many. The question regarding #2 is what we have been debating regarding the right of the executive branch to set guidelines for application of laws that Congress passes without such specificity. #3 says the SEC was somehow deficient in its administration of the law, which to me seems to be a round robin type of argument vis a vis #2. That is, how can it be deficient when standards were not present? I really don't see how the SEC was deficient, when it is being argued that it was overreaching (again, overreaching what?). And the "take care" clause simply means that the President (or in this case, his agency) needs to enforce all laws whether he / she agrees with the law or not. I don't see the application here, although perhaps it is in the complete opinion.
Your statement: "It is Congress and the President representing our interests (or not as was the case in 2008)." Our interests were protected in 2008. The economy was teetering over a cliff. I am guessing people may not have liked their methods but have taken for granted that our economic system was salvaged. Once again the Democrats sweep in and clean up the Republican messes and get blamed for it.
For example, in 1929 when the economy crashed the "financial instruments" used to "soft land" the economy in 2008 were not utilized and as a result, the dead economy highlighted to Americans who exactly was to blame for the mess for many years - Republicans.
It took another 40 years before people forgot and started electing Republicans again.
In 2008, had the government not used experimental methods, the total results of which are still unknown, the economy would have been dead for at least 5 years.
Do you think Trump would have had half a chance to win an election if everyone still remembered 8 years of Republican Bush II's dead economy?
Not hardly. So, I would say, BANK interests were protected and the story was our interests were protected as cover.
It is not clear at all, to me, that my own, or the people of this country's interest was protected.
However, I understand that the common thinking/lore is that all of the financial experimentation helped.
With $5 Trillion of those worthless Mortgage backed "securities" STILL on the books at the Fed Barbara? Who knows what will happen.
Now, we also have another $5 Trillion dollars of ETF's purchased during the Pandemic by the Fed. $10 Trillion off the books spending that we did not authorize, we do not understand and we do not know the consequences.
Mike S upstateNY, I understand your engineering perspective but most of existence falls in the grey areas. For example, mathematical models are approximations of reality. The Wharton Econometric Model was world renowned many years ago when I was at the school, but it was far from perfect.
Legislators can not precisely specify every facet of every decision an engineer or judge might face. That would require the legislature to engineer every project or every criminal approach that might ever be. It would eliminate invention. I know for a fact that engineering regulations set standards, not full designs.
Stanley. Much of engineering is not math models, but, that is the cool stuff, I agree.
More of engineering is just a slog of hard work where one has to pay attention and get the details right and then check again to make sure. THEN, be PRESENT when the project starts.
So, I am extending not a math model but an entire rigorous process.
I believe that Congress should write clear laws. Without those clear laws then 2008 can happen where the SEC does absolutely NOTHING after a bunch of crooks sell assets they knew were worthless to everyone.
The SEC is tootless already. Evidence of that toothless nature of the SEC abounds, not the least of which is not a single arrest in 2008.
Is that what you want? Because, that is not what I want. I want responsible government to write responsible laws that are clear enough to arrest crooks that do something besides rob a grocery store of a loaf of bread and go to jail.
Thank you so much Mike, for your perspective. "...not the least of which is not a single arrest in 2008" brings to mind the film "The Big Short" and book of the same name written by Michael Lewis. Well worth viewing/reading. In addition to the basic lack of legal AND moral accountability underscored by the film and book, your comments serve as a poignant reminder that as is the case with so many issues, a letter to our elected representatives is worth the time and effort.
My kids made me watch the "Big Short" one evening. I did not want to because I had already, long before, sorted out what happened through various reading methods.
Watching someone make big money on the lack of clear laws in the United States where selling worthless junk is relevant?
“ More of engineering is just a slog of hard work where one has to pay attention and get the details right and then check again to make sure. THEN, be PRESENT when the project starts.”
If we substitute “legislating” for “engineering” in this statement this entire discussion collapses. Few if any legislators have the education or mindset of a good engineer.
In the US, we have a system of common law, whereby precedent (stare decisis) and judicial rulings are used to determine legality, as opposed to a civil law system, whereby statutes and ordinances determine legality. The regulations imposed by the executive branch, to fulfill laws created by the legislative branch, seem to me to fall under this category of precedent, and declaring that unconstitutional seems cataclysmic to me. The SEC decision cited here would provide the precedent to dismantle our entire system of regulation. Yikes.
My anecdotal experience of a country with a civil law system is that laws must be written with great specificity, and apply only to situations which match those described in the law, and that therefore, there are many, many more laws on the books, which can be unwieldy. What you suggest, Mike, seems to me to fall more under this civil law ideal. While we, here in the US, allow Congress to delegate that power to the executive branch. Regulations are easier to change than laws, and hopefully that gets done by experts. When it works, this seems a better system to me.
I am wending my way through "Dark Money" by Jane Mayer. It is shocking that corporations and independently wealthy people (usually white men) manage our government to their liking. Your use of a corporate CEO as illustration fits very well. These are the guys in charge of pretty much everything. Also, it's a one way assault as corporations rarely have to listen to "the people," as government presumably has to.
Beware of "Foundations" another word for manipulation of money and politics. Extraordinary wealth has managed not only our government and its branches, but our religious, educational, and social environments. Issues and causes are distractants and are meant to demolish laws. Ultimately, it all means to serve one purpose; corporate wealth and less taxation. Corporations (actually, their CEOs and top officers) are blinkered because they have entrenched beliefs they are deserving, superior, and on the side of might and right. Since Reagan, they have been dismantling the New Deal and empowering the Republican party. (My rephrasing from the book.)
I haven’t ever gotten through that book yet and I’ve owned it for 2 years now. I found myself so frustrated that I, personally, cannot do anything to stop these filthy rich criminals.
One must surely ask, then, what exactly the "executive branch" is supposed to "execute," and how. Using a corporation as a example, the CEO is expected to implement directives from the Board of Directors who have been elected by the stockholders. The Board is not responsible for implementation, the CEO is.
While some legislation is poorly written, I think it is impossible as well as unwise to try to write all details of implementation into every legislation. The alternatives are placing implementation within Congress, which defies the Constitution, or not implementing any laws that are passed, which makes government by law irrelevant, replacing reason and equality with "might makes right." Fearful news from this decision if it is allowed to stand.
KEM, I am sure you listened carefully to Judge Ketanji Jackson's interview with Congress where the Republican side tried to highlight her "soft on child sexual abuse" sentencing. Nevermind she was within 70% of all like rulings by other judges......
She repeatedly used the specific guidance that was provided in a Congressional law to support her approach. She also repeatedly said that if different or more clear guidance in the law had been available it would have been helpful and she certainly would have followed that guidance.
I think, as an engineer having been thorough and detail oriented (which is work) for my career of successful project outcomes that: IF Congress is going to write a law, the law should detail at some reasonable level what the law is, how it should be enforced, and what breaking that law looks like and what sentencing, at a high level, should be applied.
Then, when everyone in America sees some big crime and fraud like the 2008 Bank Mortgage Fraud crash where nobody went to jail, we don't blame the SEC for doing absolutely nothing.
Instead......
We should blame Congress and the President when a bunch of crooks crash the economy selling a bunch of worthless securities IF there is a law on the books that says that is illegal. If there is no law on the books saying it is illegal to sell, worldwide, a known worthless security, then, well, I won't mind if nobody is arrested. It is legal. Even I can do it.
It is Congress and the President representing our interests (or not as was the case in 2008).
I think it is still legal to sell worthless assets to anyone anywhere in America even today. So, I am not too excited about the SEC since they already appear to me as toothless.
I have the perception that the SEC has never arrested anyone for fraud regarding selling a worthless asset and certainly not in 2008. That could be wrong, but, IF there was clear law on the books, then at least I could be outraged at one of my own representatives and make change: The SEC? I can do nothing to effect change. They all appear to be bought completely off by banks.
Now? Congress points to the SEC. The SEC points to Congress. And Banks? They will sell you anything you are dumb enough to buy.
I don't think your analogy with Justice Jackson is a good parallel.
All that you say could be correct in that an intelligible interest is rather broadly defined as something that is (paraphrased) reasonable, just, in the public interest or necessary. And if fraudulence or violation of these words cannot be proven, then it is not enforceable. In the case you mention, if someone willingly buys something knowing it has no value, that is not fraud. But if a value is represented, then it is.
More to the point, though, that is not the legal principle being attacked by this ruling. This ruling is saying that the executive branch does not have the authority to establish criteria to implement the law, i.e., to determine the intelligible interest. That is a common legislative approach to allow for changes over time, which cause struggles when the world changes such as with the internet bringing up new questions about privacy, etc.
Also Justice Jackson was referring not to definition of a crime, but to the penalty prescribed once a verdict of guilty has been reached. There is a question of specificity: Where a law specifies a penalty, that penalty should be enforced. Where the law does not specify a penalty, or provides a range of penalties, then judicial discretion is allowed to consider other factors. That discretion is what Justice Jackson was referring to.
"This ruling is saying that the executive branch does not have the authority to establish criteria to implement the law".
I will add "through the SEC".
Having added that I will add this: So, here we see the problem. It is so totally legal to sell worthless assets in America, as there is no law against it, that even the FEDERAL RESERVE bought worthless bank assets in 2008 (along with the rest of the world).
This is the problem with the SEC doing the regulating without Congressional laws making what is illegal clear.
The SEC can do nothing without clear laws. Or, alternatively, clear laws make the SEC not needed. Just have the sheriff show up at JP Morgan and arrest Jimmy Dimon and toss him in jail after reading his rights.
Why are we not doing that already? Is it because nobody in Congress has the guts to write such laws? They want to hide behind the SEC?
Or it is that Congress is unable to pass anything of consequence because of the minority’s stranglehold on the process.
Sandy, I think special interests have such strong influence on writing legislation that they are able to block substantive reform. Another casualty is the loss of compromise that actually moves towards a goal; it has been replaced by trading favors that do little to improve things other than the enhancement of power. This happens within each party as well as across the aisle. Witness the outsized influence of Manchin...
I think we need to look at the game plan on the right to define everything. All of what you describe that made the legislative body work is irrelevant when the end goal is to destroy the democracy.
KEM, and there we have the conundrum.
Democracy is not working in the USA, but, what would work?
Anything?
Certainly in the last 12 years that has been true.
Billions of dollars were paid in settlements from litigation over the bond fraud of 2008; at least one person was jailed for falsifying the value of the bonds he sold. The Fed was taken in like everyone else. That speaks more to the cozy relationship that grew like topsy of packaging mortgages with a percentage of tolerance for risky loans . That is no cozier than the relationship between large corporations and Congressional campaigns, or lobbyists and members of Congress. The problem in 2008 is not with who was regulating but that no one was regulating with common sense. If the industry relaxed loan standards to meet investment for formerly red-lined districts or populations, then who should have been watching the percentage of risky loans being packaged and sold? The banks wanted to shed those loans; investors wanted the return on the loans without the hassle of initiating them; etc. So, was analyzing the bonds legislative? No, it was executive. Trust was betrayed.
" The problem in 2008 is not with who was regulating but that no one was regulating with common sense."
OK, I will agree with this sentence, however, with no clear law on the books, written by Congress, the above sentence can be written.
WITH a clear law on the books, the above sentence, I think, would read: Americans watched as our government permitted banks to sell worthless assets illegally and even the government decided to purchase some to shore up their buddies in the banks.
No clear laws enforced by a toothless, powerless SEC KEM?
Count me out of supporting that. I think that, maybe, by disallowing the SEC to make law outside of Congress, it helps to spotlight corruption in Congress when it occurs.
Right now? Congress can point at the SEC. SEC can point at the Congress.
And,? Obama can make a ton of money on bank speeches after 8 years of supporting bailing banks out, without any law sayng that buying those assets is illegal, at the expense of the American people.
I'm glad we agree on something! Whether or not Congress would show any more common sense is debatable, I think. And whether or not they would want to do so, or simply kick the can down the road, is also debatable. But I do wonder if your comments are getting rather far afield of the ruling itself about separation of powers and the feasibility of the concept of intelligible principle. Your comments about Obama certainly are, IMO.
KEM, I appreciated your comments with reference to an understanding of the Jarkesy v. Sec. & Exch. Comm'n decision in finding the SEC ALJs unconstitutional and the effects of this decision. I tend to look to lawyers and other experts in constitutional law to understand a case such as this one. I am curious to know what you think of the following from a member of the Law Professors Blog Network. Of course, all other members of the constitutional law knowledge class, your analysis is called upon. Thank you.
Fifth Circuit Finds SEC ALJs Unconstitutional
'The Fifth Circuit recently decided Jarkesy v. Sec. & Exch. Comm'n, No. 20-61007, 2022 WL 1563613, at *1 (5th Cir. May 18, 2022). The case has significant implications for the SEC's use of administrative law judges (ALJs). The majority opinion was written by Judge Elrod and joined by Judge Oldham. Judge Davis penned a dissent. The majority issued three holdings:'
'We hold that: (1) the SEC's in-house adjudication of Petitioners' case violated their Seventh Amendment right to a jury trial; (2) Congress unconstitutionally delegated legislative power to the SEC by failing to provide an intelligible principle by which the SEC would exercise the delegated power, in violation of Article I's vesting of “all” legislative power in Congress; and (3) statutory removal restrictions on SEC ALJs violate the Take Care Clause of Article II.'
'The case involved two hedge funds founded by Jaresky, an investor, businessman, and conservative radio host. The SEC alleged that Jaresky: (i) misrepresented the identity of the prime broker and auditor; (ii) misrepresented the funds' investment parameters and safeguards; and (iii) overvalued the funds' assets to increase the fees collected. After an evidentiary hearing, an SEC ALJ found that the funds had committed securities fraud. Jaresky's defended by raising constitutional challenges to administrative adjudication, among other things.'
'Although his arguments were rejected by the Commission, the Fifth Circuit embraced them. I'll overview them briefly in turn before turning to broader context and the long term perspective.'
'7th Amendment Right to a Jury Trial'
'The Fifth Circuit concluded administrative adjudication was unconstitutional "because the SEC's enforcement action is akin to traditional actions at law to which the jury-trial right attaches. And Congress, or an agency acting pursuant to congressional authorization, cannot assign the adjudication of such claims to an agency because such claims do not concern public rights alone." As I read the opinion, the Fifth Circuit's seems to find that a right to a jury trial attaches to statutory and administrative claims which significantly overlap with common law claims. This may not be the only reading and I welcome any thoughts in the comments about the scope of this reasoning.'
'There are some immediate implications from this. If applied more broadly, this reasoning might gut much administrative adjudication outside the SEC as well. This holding does not turn on anything unique to the SEC. This would also likely significantly shift enforcement actions to federal court.'
https://lawprofessors.typepad.com/business_law/2022/05/fifth-circuit-finds-sec-aljs-unconstitutional.html
And a PS--how can both "the SEC doesn't have the right to administer this law" and "the [SEC] must take care in the administration of this law" both be true? It seems to me that this combination is a matter of throwing various arguments against the wall to see which one sticks.
Turning over the democratic Rule of Law, which has been underway for sometime and part of the country's history. is one of the primary threats to democracy here. I seek to see this decision put in that context. If and when I find sources and organizations devoted to addressing this area, I will post you and would appreciate sources and contacts you can recommend. Thank you, KEM.
The basic question, I think, is whether agency regulations developed to administer a law constitute "legislative activity" by that agency. Since agencies are under the Executive branch of government, they cannot legislate (the "non delegation" argument espoused by conservatives), that is the job of Congress. The common sense issue is how can agencies *function* without enforcing laws, or, do laws without administration delegated to to an agency have any effect? So the question, such as it is, is whether administration is legislative or executive. I just did a quick search and this seems to be a good explanation. https://ballotpedia.org/Nondelegation_doctrine //.
Since laws without administration or enforcement are useless, that is the threat to democracy. Imagine if the DOJ could not prosecute, for example...Since judicial decisions are supposed to be founded on precedent, application of this doctrine could have a domino effect. It is also interesting to note that even returning to this argument from 80-some years ago is ignoring the precedents set in the last century, and defies one of the major premises of the courtroom. A parallel is the potential over-turning of Roe, which ignores 50 years of accepted Constitutional law.
I am not a lawyer. With many lawyers in the family, I was simply raised to believe that the application of law is a matter of logic and common sense. In this day and age, I would add "and not a matter of personal philosophy or beliefs." I think the question regarding #1 is whether or not fraudulent presentation of a hedge fund's personnel, safeguards, and values is a matter of public interest under the intelligible principle doctrine. I believe that it is, because the offering was made not just to one person, but to many. The question regarding #2 is what we have been debating regarding the right of the executive branch to set guidelines for application of laws that Congress passes without such specificity. #3 says the SEC was somehow deficient in its administration of the law, which to me seems to be a round robin type of argument vis a vis #2. That is, how can it be deficient when standards were not present? I really don't see how the SEC was deficient, when it is being argued that it was overreaching (again, overreaching what?). And the "take care" clause simply means that the President (or in this case, his agency) needs to enforce all laws whether he / she agrees with the law or not. I don't see the application here, although perhaps it is in the complete opinion.
Your statement: "It is Congress and the President representing our interests (or not as was the case in 2008)." Our interests were protected in 2008. The economy was teetering over a cliff. I am guessing people may not have liked their methods but have taken for granted that our economic system was salvaged. Once again the Democrats sweep in and clean up the Republican messes and get blamed for it.
https://www.ft.com/content/b5b764cc-d657-11e6-944b-e7eb37a6aa8e#:~:text=How%20Barack%20Obama%20rescued%20the%20US%20economy
Barbara, Apology for delay.....was working.
Were our interests protected in 2008?
For example, in 1929 when the economy crashed the "financial instruments" used to "soft land" the economy in 2008 were not utilized and as a result, the dead economy highlighted to Americans who exactly was to blame for the mess for many years - Republicans.
It took another 40 years before people forgot and started electing Republicans again.
In 2008, had the government not used experimental methods, the total results of which are still unknown, the economy would have been dead for at least 5 years.
Do you think Trump would have had half a chance to win an election if everyone still remembered 8 years of Republican Bush II's dead economy?
Not hardly. So, I would say, BANK interests were protected and the story was our interests were protected as cover.
It is not clear at all, to me, that my own, or the people of this country's interest was protected.
However, I understand that the common thinking/lore is that all of the financial experimentation helped.
With $5 Trillion of those worthless Mortgage backed "securities" STILL on the books at the Fed Barbara? Who knows what will happen.
Now, we also have another $5 Trillion dollars of ETF's purchased during the Pandemic by the Fed. $10 Trillion off the books spending that we did not authorize, we do not understand and we do not know the consequences.
That is not in my interest. I don't think anyway.
Just the tiny bit of research I did on this subject yielded an awful lot of opinions on the subject. Here are 2 more links containing opposing views.
https://www.ft.com/content/b5b764cc-d657-11e6-944b-e7eb37a6aa8e#:~:text=How%20Barack%20Obama%20rescued%20the%20US%20economy
and
https://www.pbs.org/newshour/economy/4-economists-evaluate-obamas-economic-legacy#:~:text=4%20economists%20evaluate%20Obama%E2%80%99s%20economic%20legacy
Here is broader view Mike
https://obamawhitehouse.archives.gov/the-record/economy#:~:text=Stabilized%20an%20Economy%20in%20Crisis%20and%20Laid%20the%20Groundwork%20for%20Long%2DTerm%20Growth
Mike S upstateNY, I understand your engineering perspective but most of existence falls in the grey areas. For example, mathematical models are approximations of reality. The Wharton Econometric Model was world renowned many years ago when I was at the school, but it was far from perfect.
Legislators can not precisely specify every facet of every decision an engineer or judge might face. That would require the legislature to engineer every project or every criminal approach that might ever be. It would eliminate invention. I know for a fact that engineering regulations set standards, not full designs.
Stanley. Much of engineering is not math models, but, that is the cool stuff, I agree.
More of engineering is just a slog of hard work where one has to pay attention and get the details right and then check again to make sure. THEN, be PRESENT when the project starts.
So, I am extending not a math model but an entire rigorous process.
I believe that Congress should write clear laws. Without those clear laws then 2008 can happen where the SEC does absolutely NOTHING after a bunch of crooks sell assets they knew were worthless to everyone.
The SEC is tootless already. Evidence of that toothless nature of the SEC abounds, not the least of which is not a single arrest in 2008.
Is that what you want? Because, that is not what I want. I want responsible government to write responsible laws that are clear enough to arrest crooks that do something besides rob a grocery store of a loaf of bread and go to jail.
Thank you so much Mike, for your perspective. "...not the least of which is not a single arrest in 2008" brings to mind the film "The Big Short" and book of the same name written by Michael Lewis. Well worth viewing/reading. In addition to the basic lack of legal AND moral accountability underscored by the film and book, your comments serve as a poignant reminder that as is the case with so many issues, a letter to our elected representatives is worth the time and effort.
Thanks John,
My kids made me watch the "Big Short" one evening. I did not want to because I had already, long before, sorted out what happened through various reading methods.
Watching someone make big money on the lack of clear laws in the United States where selling worthless junk is relevant?
Not my idea of a warm evening with family.
:-)
“ More of engineering is just a slog of hard work where one has to pay attention and get the details right and then check again to make sure. THEN, be PRESENT when the project starts.”
If we substitute “legislating” for “engineering” in this statement this entire discussion collapses. Few if any legislators have the education or mindset of a good engineer.
Victor.
But many of them are from Harvard? Should that not endow them with the ability to work hard, think, negotiate, read, discern and deliver?
Ok, yes, that sentence is a joke. I make fun of Harvard at least once a week.
In the US, we have a system of common law, whereby precedent (stare decisis) and judicial rulings are used to determine legality, as opposed to a civil law system, whereby statutes and ordinances determine legality. The regulations imposed by the executive branch, to fulfill laws created by the legislative branch, seem to me to fall under this category of precedent, and declaring that unconstitutional seems cataclysmic to me. The SEC decision cited here would provide the precedent to dismantle our entire system of regulation. Yikes.
My anecdotal experience of a country with a civil law system is that laws must be written with great specificity, and apply only to situations which match those described in the law, and that therefore, there are many, many more laws on the books, which can be unwieldy. What you suggest, Mike, seems to me to fall more under this civil law ideal. While we, here in the US, allow Congress to delegate that power to the executive branch. Regulations are easier to change than laws, and hopefully that gets done by experts. When it works, this seems a better system to me.
KR, a reasonable perspective.
When a process works, I am on board for it.
I am wending my way through "Dark Money" by Jane Mayer. It is shocking that corporations and independently wealthy people (usually white men) manage our government to their liking. Your use of a corporate CEO as illustration fits very well. These are the guys in charge of pretty much everything. Also, it's a one way assault as corporations rarely have to listen to "the people," as government presumably has to.
Beware of "Foundations" another word for manipulation of money and politics. Extraordinary wealth has managed not only our government and its branches, but our religious, educational, and social environments. Issues and causes are distractants and are meant to demolish laws. Ultimately, it all means to serve one purpose; corporate wealth and less taxation. Corporations (actually, their CEOs and top officers) are blinkered because they have entrenched beliefs they are deserving, superior, and on the side of might and right. Since Reagan, they have been dismantling the New Deal and empowering the Republican party. (My rephrasing from the book.)
I recently finished reading Dark Money. Scary stuff, but it shouldn't be unknown to anyone who reads the omens. Or reads HCR. I fear for our democracy
I never thought corporations, especially the oil and gas (the Kochtopus, e.g,) cabals were quite so bold and relentless. Even the Supreme Court...
I haven’t ever gotten through that book yet and I’ve owned it for 2 years now. I found myself so frustrated that I, personally, cannot do anything to stop these filthy rich criminals.
Damn, logic. Wish the SC had a tad of that.
I've nothing more to add, other than to say thanks for your comment.