Elon Musk and Mark Cuban have joined with Phillip Goldstein, Nelson Obus, Manouch Moshwayedi, and the Investor Choice Advocates Network (ICAN) in filing an Amicus brief in regard to a Securities and Exchange Commission (SEC) court case. The case has to do with Patriot28 and George Jarkesy and an ongoing lawsuit.
The friends of the court filing states that the “Amici” believe the SEC should not be permitted to pick and choose whether or not a defendant is granted the right to have a jury trial or forced to go through an administrative court hearing without a jury.
To quote the document:
“Unlike defendants in federal court proceedings, respondents in SEC administrative proceedings are not afforded the right to a jury trial or the benefits and protections of the federal rules of evidence and procedure. Instead, when the SEC elects to use an administrative proceeding, whether before an ALJ or the Commissioners of the SEC, the SEC itself is the sole fact finder and determines a respondent’s liability and punishment without the involvement of a jury. Such proceedings contravene the protections guaranteed to litigants by the United States.”
The brief claims the use of administrative law judges (ALJ) is simply unconstitutional, highlighting the SEC demands transparency and disclosure from participants in the securities markets, yet administrative proceedings lack similar rigor and transparency.
Recently, Elon Musk was the target of an SEC order to “comply with an investigative subpoena calling for his appearance for testimony.” Following the receipt of the Order, Musk predicted an “overhaul” of the SEC, stating:
“A comprehensive overhaul of these agencies is sorely needed, along with a commission to take punitive action against those individuals who have abused their regulatory power for personal and political gain. Can’t wait for this to happen.”
He said the probability of such an overhaul was 100%.
Cuban has skirmished with the SEC as well – beating a case that alleged insider trading several years ago.
ICAN is a non-profit group founded by the leading attorney and partner at Paul Hastings, Nicolas Morgan, the firm that has filed the brief alongside Quinn Emmanuel. ICAN advocates on behalf of smaller investors and entrepreneurs who too frequently are steamrolled by federal regulations, including the SEC. Morgan previously worked at the SEC as a trial attorney so he has boots-on-the-ground experience as to how the enforcement process works at the Commission.