SEC Dishonesty

I’ve written before about the SEC’s internal administrative judge stacked deck system.

Judge Brenda Murray explained to [eight] brokers that the commissioners who run the SEC and approve all the civil charges filed by the agency don’t want its judges second-guessing them.

“So for me to say I am wiping it out,” Ms Murray said at the [motion to dismiss] hearing last year, “it looks like I am saying to these presidential appointee commissioners, I am reversing you. And they don’t like that.”

It doesn’t get any more blatant than that.

And yet, there’s this:

In another glimpse inside the SEC’s court, [Judge Cameron] Elliot told the defendants during settlement discussions on a case they should be aware he had never ruled against the agency’s enforcement division, said a person who was there. The judge said the defendants might therefore want to do a deal with the agency rather than fight their case at a hearing before him[.]

No extortion here. Mm, mm.

Whether this is dishonesty or rank cowardice isn’t material here. What is material is that these performances by SEC administrative judges are, by themselves, reason to do away with the SEC’s administrative judge system altogether and refer cases the SEC brings to Federal—or State—courts, where the defendants can get an actual fair trial.

These sham performances also should prompt a Congressional review of all administrative judge systems, Federal government wide, with a requirement that each entity having such a system prove it needs it and that the Federal and State court systems cannot handle the cases.

Free Speech

Universities are struggling to balance the free exchange of ideas with students’ growing desire to be shielded from offensive views, a philosophical divide at the heart of recent protests that have roiled campuses around the country.

That’s the opening paragraph of Dan Frosch’s and Tamara Audi’s Friday piece in The Wall Street Journal. There’s no struggle here, though, except in the minds of school administrators and professors too timorous, too disrespectful of free speech to be fit to hold their positions.

While the tension between political correctness and open discourse has riven colleges for decades, a hunger strike and protests over racial incidents that forced out the University of Missouri’s president on Monday have supercharged the debate.

This is a coarse misunderstanding, and not only by Frosch and Audi, but by the precious little snowflakes at each of those universities and colleges. There is no such tension at all. What is politically incorrect is the attempt to control discourse in order to protect the self-proclaimed too-fragile from the vicissitudes of life.

Freedom of speech begins, of necessity, with protecting the most offensive, the most uncomfortable of speech. As soon as governments begin banning the most offensive or uncomfortable speech, the definition of “offensive” and of “uncomfortable” begins to be elevated. In very short order, indeed, today’s ordinary, inoffensive, comfortable (and comforting) speech becomes offensive and uncomfortable. Especially to the men in government who now are making the definitions.

Here’s an excerpt from a 6th Circuit en banc ruling on a free speech/free exercise case from Dearborn, MI [cites omitted]:

Diversity, in viewpoints and among cultures, is not always easy. An inability or a general unwillingness to understand new or differing points of view may breed fear, distrust, and even loathing. But it “is the function of speech to free men from the bondage of irrational fears.” Robust discourse, including the exchanging of ideas, may lead to a better understanding (or even an appreciation) of the people whose views we once feared simply because they appeared foreign to our own exposure. But even when communication fails to bridge the gap in understanding, or when understanding fails to heal the divide between us, the First Amendment demands that we tolerate the viewpoints of others with whom we may disagree. If the Constitution were to allow for the suppression of minority or disfavored views, the democratic process would become imperiled through the corrosion of our individual freedom. Because “[t]he right to speak freely and to promote diversity of ideas…is…one of the chief distinctions that sets us apart from totalitarian regimes,” dissent is an essential ingredient of our political process.

The civil-rights era cases tell us that police cannot punish a peaceful speaker as an easy alternative to dealing with a lawless crowd that is offended by what the speaker has to say … The Supreme Court … has repeatedly affirmed the principle that “constitutional rights may not be denied simply because of hostility to their assertion or exercise.

It would do these children a great service to learn to read (a form of free speech…), and then to add this sort of thing to their literature lists. It would do the administrators and professors a great service to steel themselves to reading and understanding our Constitution. Their disdain for such responsibility is microaggression of monstrous proportion against these children.

To quote, sort of, another man, life is hard. It’s harder if you’re precious and fragile. Or if you’re in a position of responsibility that exceeds your courage.

“The Law Must Change”

There are a couple of cases before the Supreme Court in this session involving questions of excessive punishment. One case involves a defendant on death row in a case where a jury rendered a majority advisory verdict applying the death penalty on the defendant’s conviction of murder, with the judge having the final say. The argument here is that this

violates a 2002 precedent that defendants are entitled to have a jury, rather than a judge, determine a death sentence.

The other case, though, is the one that interests me. In this case, a 17-year-old, a juvenile under the definitions extant at the time, was convicted in 1963 of murdering a sheriff’s deputy and given a life without parole sentence. His appeal asks the Court to make retroactive its 2012 ruling that

juveniles cannot automatically be sentenced to life imprisonment without the possibility of parole.

The government agrees with the defendant in this case, which may or may not be an appropriate thing to do in such matters, depending on the facts of a particular case.

What’s of critical importance here, though, is the government’s argument in supporting the defendant. Deputy Solicitor General Michael Dreeben argued

The law must change to accommodate the compelling interests in having the characteristics of youth that mitigate culpability considered in the sentencing process[.]

That’s absolutely true. Laws passed by our elected representatives must change to accommodate society’s changing compelling interests. But the courts cannot do that. The courts’ role is strictly limited under our social compact to striking a law down if it violates our Constitution and to applying the law as it is written if the law is Constitutional. The task of making law, or of modifying existing law, is solely within the province of our legislature, our elected representatives, since making or modifying law is purely a political matter and not at all a judicial one.

The Supremes, if they’re to be true to their oaths of office, must reject the appeal. The Justices certainly can, in their published opinion(s) on the case, advise the Congress to make changes the Justices individually or collectively think appropriate, but they may not legislate from the bench.

Free Speech

So long as the government determines what’s free to be said.

There’s this American rock band, all of whose members are of Asian heritage, who call themselves The Slants. When they tried to trademark their name, the US Patent Office refused, claiming the name is “disparaging.” The matter is now before the US Court of Appeals for the Federal Circuit, which is the appellate court that hears such cases. The Court is hearing the matter en banc, or the whole court is handling the appeal instead of the usual three-judge panel.

The government is censoring naming. At oral argument,

Judge Kimberly Moore asked what would happen if the government started rejecting copyrights for controversial art or other expressive works as it is doing with trademarks.

Would there be “no more porn? No more crucifixes in urine?”

The government is arguing, and it’s serious,

[T]he law governing trademark registrations does not violate the First Amendment…. Its purpose is not “to help people to make a political statement or prevent people from making political statement[.],

Indeed. However, the government’s lawyer, Daniel Terry, is arguing that Government is the one that will determine what is political speech that the government must protect and what is not political speech that the government gets to censor. And Terry argued with that claim that Government has determined that a name can never be political speech.

A Step in the Right Direction

But it remains woefully insufficient, and further changes need to be pushed—apparently from outside—and those additional changes need to happen quickly.

The Securities and Exchange Commission said Thursday it will overhaul its in-house tribunal following months of escalating legal challenges and criticism of its increased use of its own judges.

Under the new rules, defendants will get more time to prepare: up to eight months, instead of the SEC’s “rocket docket” of pacing that suits the agency, regardless of the time actually needed to prepare. Defendants also will be able, for the first time, to get sworn testimony as part of their defense preparation.

These are crucial changes, to be sure.

However.

The SEC still will use judges that are explicitly on the SEC payroll to hear the cases the SEC brings against defendants. The SEC still will use judges that are explicitly on the SEC payroll to hear defendants’ appeals of the SEC’s house judges’ decisions.

Absent corrections to those failings, the SEC’s “courts” will remain very much kangaroo courts.