Elon Musk and Mark Cuban Team Up, Challenge SEC’s Jury-Less Trials

In a move that is sure to send shockwaves through the crypto and finance world, High-profile figures Elon Musk and Mark Cuban have teamed up to file a supportive amicus brief in the SEC v. Jarkesy case.

The brief comes at a time when the SEC is already facing scrutiny for its handling of enforcement actions. Here are the details.

Equal Rights for All!

Legal representatives for Musk and Cuban have presented the brief to the Supreme Court. Their argument centers on the current practices at the Securities and Exchange Commission (SEC), asserting that they lead to unequal outcomes for SEC defendants and infringe on their constitutional right to a jury trial, protected by the Seventh Amendment.

The heart of the matter revolves around the use of in-house judges in SEC cases, which raises concerns about their constitutionality. George Jarkesy, the plaintiff in this case, claims that the SEC’s internal adjudication process, devoid of a jury and overseen by commission-appointed administrative law judges, infringes on his rights under the Seventh Amendment.

This effectively results in a trial by a single judge, acting as both judge and jury.

Elon Musk in Hot Water

Elon Musk, the CEO of X (formerly known as Twitter), finds himself entangled in his third significant legal battle with the financial regulator. This particular case centers on his acquisition of Twitter, including the public statements and disclosures made during the acquisition.

An Eye on the Past

Page 10 of the amicus brief spotlights a recurring pattern from 2013 to 2014 when the SEC moved more cases from federal courts to internal proceedings. This shift was prompted by a series of losses in jury trials involving insider trading cases.

The Supreme Court is scheduled to hear the Biden administration’s appeal on November 29. It contends that if the Jarkesy decision isn’t overturned, it could have “massive” repercussions throughout the federal government.

April Revelation

This comes on the heels of the SEC’s admission in April 2022 that its employees had improper access to privileged materials meant for the Commissioners, which were off-limits to enforcement staff during administrative proceedings.

In May 2022, the appeals court ruled that Jarkesy’s right to a jury trial was indeed infringed upon, marking a noteworthy development in this legal saga.

Read More: XRP Lawyer Deaton Slams Gensler for Lack of Clarity on Crypto Laws, Demands Resignation

Pleading for Justice

Musk and Cuban’s amicus brief underscores the SEC’s recent acknowledgment of its enforcement personnel having improper access to privileged documents meant solely for the Commissioners.

Elizabeth Prelogar of the Justice Department argues that the 5th Circuit’s decision was mistaken in asserting that Congress violated the Seventh Amendment by permitting the SEC to initiate administrative proceedings seeking civil penalties.

Now, Musk and Cuban are urging the Supreme Court to endorse the 5th Circuit’s decision and reverse its remand order to the Commission.

The question remains: will Musk and Cuban succeed? Only time will tell.