Justice Scalia died last year and replacing his position has been held up by partisan politics ever since. President Trump has made his pick, federal appeals court judge Neil Gorsuch from the 10th Circuit, and the confirmation battle has begun.
Being very liberal on social issues, I’m disappointed that the Senate chose not consider President Obama’s pick for the vacancy. We’re now faced with a justice who is likely to cause an erosion of some of the liberal gains we have seen on social issues.
But Compliance Building is about compliance so I quickly looked for some of judge Gorsuch’s opinions involving the Securities and Exchange Commission or private funds. I didn’t find much.
In ACAP Financial v. US SEC (2015), Judge Gorsuch wrote the opinion upholding an SEC penalty levied against the appellants for failing to take sufficient steps to guard against the firm’s involvement in the unlawful trading of unregistered shares. I found the writing to be very clear and easy to read. It lacks the ponderous rhetoric of many court opinion.
The decision is an easy one to find in favor of the SEC, so it does not offer much insight. The appellants did not argue their liability, but merely disputed the remedy imposed. The remedy was one proscribed for “egregious” behavior and they argued that their behavior was not “egregious.” The judge goes on for ten pages shooting down the appellants’ arguments, none of which even come close.
Gorsuch’s 10th Circuit is responsible for the Bandimere decision that recently struck down the SEC’s current system of administrative law judges. That put the 10th Circuit in opposition to other appeals courts, setting up a potential clash at the Supreme Court. However, Judge Gorsuch was not one of the appellate judges on the Bandimere case.
Let me know if you find any other cases from Judge Gorsuch that are relevant to private funds, compliance or the SEC.