Fall 2024
Change that Outlasts Election Cycles
Over the past two decades — first as an SEC lawyer, later in private practice, and now at ICAN—I've witnessed first-hand the devastation caused by the juggernaut of the SEC. Countless lives and businesses have been destroyed often over administrative issues that involve no investor harm or even the allegation of fraud. This pattern of regulatory overreach has persisted across changing Administrations in Washington and is only getting worse.
With eyes focused on the upcoming election, many wonder how each potential Administration might impact businesses and our economy. But history has demonstrated that changes in Administrations often have minimal influence on the day-to-day practices of regulatory agencies like the SEC. That is precisely why ICAN is laser-focused on a bottom-up litigation strategy designed to effect real change in SEC behavior, building a strong legal foundation to counter the agency's increasingly aggressive enforcement practices through our collective efforts to defend individuals caught in the SEC's regulatory web.
As the only public interest law firm singularly focused on tackling SEC overreach, donations to ICAN are investments in long-term, systemic change that will outlast any election cycle. ICAN's work has the potential to fundamentally alter the landscape in which elected officials operate, regardless of political affiliation, protecting individual investors and entrepreneurs while working towards universal access for all Americans to the benefits of robust capital markets.
In this edition of our Ticker Tape Newsletter, we highlight stories from Main Street businesses and investors demonstrating why ICAN's individual empowerment, litigation-focused approach is crucial for lasting reform.
Our critical work wouldn’t be possible without ICAN’s growing network of generous donors. I hope you will consider supporting our efforts and sharing this newsletter with others you think might be interested in ICAN’s work.
With thanks for your continued support,
Nick Morgan
Founder and President of ICAN
Jarkesy Aftermath: SEC Retreats on Accounting Bars, Uncertainty and Damage Remain
This month, our SEC Roundup Series featured two interviews related to the SEC’s recent move to drop cases it previously brought against some accountants in the SEC’s administrative courts in the wake of the Jarkesy decision this summer. The allegations and penalties the agency has been seeking and getting in its byzantine in-house system are the types that Jarkesy determined are protected by the 7th Amendment and deserve the safeguards and benefits of Federal Court. Although the SEC has not commented publicly regarding its motivation, the SEC has now abandoned pending, contested administrative proceedings against accountants.
While we’re pleased to see the Jarkesy decision begin to force the SEC out of its unconstitutional administrative proceedings, our SEC Roundup episodes highlight the continued work to be done on SEC reform as the agency’s actions over technical infractions continue to ruin lives, drive up costs, and discourage participation in certain capital markets professions.
In the first video of a two-part series on this topic, we talk directly with one of the accountants who had his case dropped, Ira Viener. While it is undoubtedly a relief to know the battle is over, Ira tells us how the SEC’s actions destroyed his livelihood. The case may be over as far as the agency is concerned, but Ira has no opportunity to prove his innocence or recourse for the hefty legal expenses he has incurred.
Like other defendants in this situation, he’s been left with his reputation in tatters, saying, “Google makes it look like I committed a felony,” regarding how the SEC’s public documents about his alleged infraction bankrupted his reputation.
Watch our discussion with Ira Viener here:
For our second episode of the series, we talk with former SEC Enforcement Director Andrew Ceresney, now a partner at Debevoise & Plimpton, about his federal court case for one of the affected accountants and the broader impacts of the SEC’s practices in this area.
Andrew gives great insight into the inner workings of these cases, and we discuss the agency’s pivot as it prepares to bring such cases to Federal Court. We also touch on the current shortage of accountants and how the SEC’s egregious enforcement activity may continue to exacerbate the problem - discouraging new professionals from entering the field while continuing to destroy the practices of existing accountants.
Watch our discussion with Andrew Ceresney here:
You can revisit our Amicus Brief and Press Release about the Jarkesy case here.
Our Continuing Mission: Halting the Harm the SEC is Doing to Those it is Entrusted with Protecting
Today, in an era of unprecedented economic dynamism, access to capital markets — and the opportunities they afford—is increasingly being limited by overzealous regulation. In an attempt to “protect” investors and entrepreneurs, the SEC is expanding its interventions in the operation of America’s capital markets.
As a result of the SEC’s ill-advised “protection through prohibition” approach, the bar continues to be raised on who can invest, and entrepreneurs are increasingly limited in how they can raise the capital needed to launch or expand new efforts.
On a recent episode of our Capital Ideas series, Jasmin Sethi of Sethi Clarity Advisers draws on her decade in finance and her role on the SEC's Small Business Capital Formation Advisory Committee (SBCFAC) to highlight the importance of continuing to expand investment access:
“… broadening the accredited investor pool could help minority founders who may not have wealthy networks but could benefit from smaller investments from a more extensive base of contributors.”
Watch the full episode here:
Challenging the SEC’s accredited investor definition is just one way ICAN is working to ensure that all Americans have access to robust capital markets, allowing individuals to improve their financial circumstances and, by extension, that of their family and community.
At the same time, ICAN continues to push for clearer limits on key issues regarding the SEC’s purview. The agency, for example, continuously seeks to expand the definition of what constitutes a security, thereby expanding the SEC’s own jurisdiction.
Revisit ICAN’s appeal on behalf of its clients Eric, Caleb, and Brenda, who are challenging one such attempted expansion of the SEC’s jurisdiction here.
Representative Ritchie Torres (D-NY) brilliantly highlighted this issue during a recent congressional hearing with SEC Chair Gary Gensler when he asked, “Is a Yankees ticket a security?” With this simple question, the Congressman exposed how the agency's aggressive approach to defining its own jurisdiction without clear limits can create uncertainty for economic innovators. Such strategic ambiguity stifles growth and discourages investment in new endeavors, especially by those who cannot afford to risk incurring the ire of the SEC.
You can watch the short video of the conversation on Rep. Torres’s post on X.
As it happens, just before Rep. Torres critiqued the SEC's aggressive approach toward digital assets, Nick was the featured speaker at the Atlanta Blockchain Center discussing the exact same topic. Center leader Marlon Williams invited Nick to speak about ICAN's representation of the Pulse Chain Foundation and more broadly about the SEC's regulation by enforcement approach to the crypto industry.
(Read more about ICAN's Pulse Chain Foundation representation here).
Nick Morgan and Marlon Williams at the Atlanta Blockchain Center
Wrapping Up
As we approach year-end, ICAN is building on the momentum of our recent victory in our first case to advance an ambitious litigation agenda. Our team continues to expand our impact through strategic amicus briefs and carefully selected new cases. In next month's Spotlight Newsletter, we'll introduce you to our newest client and detail our challenge to the SEC's controversial "forever bars" practice. This case, like each one we undertake, has the potential to create meaningful, lasting reform that benefits both the business sector and the investor community.
Your donation makes a difference. As a nonprofit law firm offering free legal services, we rely on supporters like you to help us challenge SEC overreach and protect investors' rights.
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Forwarding this newsletter to someone who might be interested in any of these topics, or
If you’re a member of the press and are covering a story where ICAN could contribute a comment or information, please reply to this email.
And last but certainly not least, consider donating to help us bolster our legal advocacy fund for small businesses and investors. Please reply to this email to discuss a donation, or click here.
With thanks,
Nick Morgan
Founder and President of ICAN
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