Economy

The Fifth Circuit court dealt a major blow to the Securities and Exchange Commission’s ability to enforce securities law and seek penalties for violations. In its 2-1 ruling, the court said that using SEC judges, also known as administrative law judges, is unconstitutional because it denies fraud defendants their right to a jury trial. The court also said that SEC judges have no authority under the Constitution because Congress did not provide guidance on when the SEC should bring cases in-house instead of a court.
Here’s what this decision means: the Fifth Circuit gutted the ability of a regulatory agency to enforce federal law. Congress has the power to give federal agencies the authority to enact regulations that protect us in our daily lives. Congress defines each agency’s goals, but leaves it up to the health and safety experts in those agencies to craft and enforce regulations. For instance, the FDA didn’t need congressional approval to recall the defective baby formula that was making babies sick. The SEC doesn’t need congressional approval to charge hedge fund managers with securities fraud.
But this ruling says that the SEC actually doesn’t have the power to enforce securities law, meaning all other agencies’ enforcement power could be at risk. That means the federal government has essentially lost the ability to enforce regulations. This decision won’t just apply to the SEC: gutting regulations has been a key part of the Republican agenda for decades. I know regulations don’t sound very exciting, but it’s how the government keeps us safe: OSHA protects us in our workplaces, the EPA keeps our air fresh and our water clean, the FDA makes sure we don’t get sick from eating certain foods, et cetera.
Make no mistake: deregulation is anti-worker, anti-consumer, and anti-environment. If this agenda succeeds, we all lose.

(FB)