Scalia and Thomas Seek Supreme Court Case Challenging SEC Deference
11th November 2014
On November 10, the U.S. Supreme Court denied certiorari to a hedge fund manager's request for review of an insider trading SEC Rule 10(b)(5) two year conviction. However, in a rare attached note, Justices Scalia and Thomas expressed a clear desire to grant cert and hear a case on the question of: "Does a court owe deference to an executive agency's interpretation of a law that contemplates both criminal and administrative enforcement?" The justices said that the SEC seems to be seizing on ambiguities in federal laws to define new crimes — resolving those ambiguities to the defendant's express disadvantage, instead of following a precedent called lenity, which requires them to be resolved in the defendant's favor. Scalia and Thomas questioned the ability of the SEC, or any other administrative/executive entity, to itself define the scope of criminal liability under a statute.