WASHINGTON – Barbara Comstock, Executive Director of the American Consumer & Investor Institute, released the following statement today on U.S. Securities and Exchange Commission Chairman Gary Gensler’s recent series of court losses.
“It has been an embarrassing run in the courts for SEC Chairman Gary Gensler as he continues to rack up loss after loss on his radical rulemaking and enforcement agenda. What should be clear to him at this point is that you cannot run roughshod over the Constitution and the rulemaking process, exceed your statutory authority, and expect your radical policies to hold up in court,” said American Consumer & Investor Institute Executive Director Barbara Comstock. “Gensler’s ideologically-driven agenda is not only legally untenable, but also harmful to retail investors and our economy. Gensler’s unlawful overreach, coupled with his history of mismanagement, underscore the need for an immediate change in leadership at the SEC.”
Earlier this week, the Fifth Circuit Court of Appeals ruled against the SEC in National Association of Manufacturers v. SEC, overturning Gensler’s hasty, politically-driven rescission of important provisions of the SEC’s 2020 proxy advisory firm rule adopted under former Chairman Jay Clayton. This loss follows other high profile court decisions rebuking Gensler’s radical agenda:
- Earlier this month, the Fifth Circuit struck down the SEC’s unnecessary and harmful private funds rule (National Association of Private Fund Managers v. SEC), concluding that the SEC “exceeded its statutory authority in adopting the Final Rule.”
- This past May, the U.S. District Court for the District of Utah ordered the SEC to pay $1.8 million in legal fees for its “gross abuse of the power entrusted to it by Congress” after making misrepresentations to the Court in connection with its request for a temporary restraining order, asset freeze, and other relief against blockchain company Debt Box (SEC v. Digital Licensing Inc.).
- In November 2023, the Fifth Circuit tossed Chairman Gensler’s politically-driven share buyback rule (U.S. Chamber of Commerce v. SEC), finding that the SEC “failed adequately to substantiate the rule’s benefits” and “failed to respond” to the Chamber’s comments on quantification.
Supreme Court rulings this week have also dealt major blows to the runaway administrative state. In SEC v. Jarkesy, the Court restored the important due process right to a jury trial for those facing SEC fraud suits. Democrats had previously sought to push more and more SEC cases through the agency’s in-house administrative courts, which lack many of the Constitutional protections available in federal court proceedings. And, in Loper Bright Enterprises v. Raimondo, the Court finally disposed of Chevron deference, which has long been abused by unaccountable federal bureaucrats to interpret the laws of Congress to their liking. The Court held, “The Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency as acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.”