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Dustin Nofziger, a member of Pryor Cashman’s Financial
Institutions Group, wrote an article for Bloomberg Law
about the upcoming U.S. Supreme Court case Securities &
Exchange Commission v. Jarkesy, which is set to impact several
regulatory agencies.
In “SEC v. Jarkesy’s Implications for the FDIC &
Other Prudential Banking Regulators,” Dustin notes that the
Court’s decision later in the term “could have significant
implications for the Federal Deposit Insurance Corporation (FDIC)
and the other federal prudential banking regulators, namely the
Board of Governors of the Federal Reserve System (FRB), Office of
the Comptroller of the Currency (OCC), and National Credit Union
Administration (NCUA).”
Dustin explains the case’s background and appellate path to
SCOTUS, and details key elements of the oral arguments held before
the Court in November 2023. He then previews potential implications
for regulators:
It is unclear that a Supreme Court holding that Jarkesy was
entitled to a jury will impact the FDIC and the other federal
prudential banking regulators. And because, unlike the SEC and the
Consumer Financial Protection Bureau (CFPB), the prudential banking
regulators do not have the option to bring enforcement actions in
federal court, a holding that Congress unconstitutionally delegated
legislative power to the SEC when it gave the SEC the unfettered
statutory authority to choose where to bring an enforcement action
is unlikely to impact them.
On the other hand, a holding that the SEC’s ALJs are
insufficiently accountable to the President under the Take Care
Clause may be extremely consequential for the prudential banking
regulators, as it would likely mean that their ALJs also are
unconstitutional.
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