Wall Street's top regulator faces worsening battle in wake of Supreme Court ruling
By Chris Prentice and Pete Schroeder
WASHINGTON, June 28 (Reuters) -The Supreme Court's move to curb federal agency powers could curtail efforts by the U.S. Securities and Exchange Commission to establish new rules to police Wall Street and invite more litigation, legal experts said in the wake of Friday's landmark ruling.
The court overturned a 1984 precedent that had given deference to government agencies in interpreting laws they administer. The decisionraises the specter of fresh grounds on which to challenge the markets watchdog in court as it rolls out new policies or seeks to regulate new corners of the markets.
The SEC is already fending off an increasing legal assault from public companies, major Wall Street firms and well-heeled cryptocurrency players.
The SCOTUS decision, made 6-3, is likely to tie the SEC's hands as it rolls out new rules, according to half a dozen legal experts.
The SEC did not respond to a request for comment. SEC Chair GaryGensler told Reuters this month that the agency pivots as required by courts' interpretation of the law.
The ruling is a "game-changer," said Richard Hong, a former SEC trial lawyer and partner with the Morrison Cohen law firm.
The SEC will likely have more reason to pause before acting when seeking to police new financial instruments, said Cary Coglianese, a law professor at the University of Pennsylvania who specializes in regulation.
"It will make it more difficult for agencies to adapt their understandings of statutes in the face of new circumstances," Coglianese said.
The precedent, known as the Chevron deference after a ruling involving the U.S. oil company,had been cited by the SEC and other agencies in prior court cases to justify new regulatory efforts, as they deemed the activities within their purview. But now it would fall solely to a court to determine if the agency is acting within the law, which experts saidcould have a chilling effect.
Proponents of the approach argue that the Chevron deference allows federal regulatory bodies to adapt to changing times and circumstances. But the Chevron doctrine has come under growing criticism from conservatives, arguing it allows rule-writers to overstep their legal authorities.
While the SEC and other regulators have other tools on which to lean, Chevron has been a bedrock of agency rulemaking.
Between 2003 and 2013, Chevron was applied 66.7% of the time when litigating SEC rules in circuit courts and in those cases the agency won just over 81%, according to 2017 research published in the Michigan Law Review.
"Going forward, agency action will be under even greater scrutiny and there will likely be more opportunities for the regulated community to challenge agency rules and adjudications," said Varu Chilakamarri, a partner at K&L Gates.
Friday's ruling is the latest effort of the conservative "war on the administrative state", which aims to weaken federal agencies across the board. Gensler's ambitious agenda has made the agency, which oversees around 40,000 entities, a top target.
The SEC stayed this year's landmark climate disclosurerule due to legal challenges. A federal appeals court this month struck down its overhaul of private fund oversight on the grounds the agency exceeded its authorities.
“The challenge to the SEC’s climate rule was already poised to be a difficult fight for the agency," said Leah Malone, leader of Simpson Thacher’s ESG and sustainability practice. Friday's shift "raises even further questions about the survival of the climate rule, as well as other pending rule proposals that have been in the spotlight,” Malone said.
Friday's ruling is the second blow to the SEC's authority in as many days from the Supreme Court. On Thursday, the justices ruled the agency's reliance on in-house courts to handle enforcement cases was unconstitutional.
"If yesterday’s decision was causing tremors, causing some dishes to tumble out from the cupboards, today’s case is a Richter-7 earthquake," said Hong.
Reporting by Pete Schroeder and Chris Prentice
Additional reporting by Hannah Lang, Ross Kerber and Michelle Price; editing by Megan Davies and Rod Nickel
Asset collegati
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.
