Consolidating The Administration And Enforcement Of The Federal Securities Laws Within The Securities And Exhange Commission PDF Download

In 1984, the Supreme Court of the United States ruled in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. ("Chevron") that courts owe deference to an executive agency's interpretation of a statute. On November 10, 2014, the Supreme Court in Whitman v. United States, a criminal insider trading case, denied a petition for writ of certiorari. In a statement accompanying the denial of certiorari, Justice Scalia questioned whether a federal court owed deference to an executive agency's interpretation of a statute that has both criminal and administrative applications. The crux of Justice Scalia 's concern is that the Securities and Exchange Commission (the "Commission" or "SEC"), through its rulemaking authority, is usurping the role of Congress by defining criminal conduct. Specifically, Justice Scalia reiterated his belief that the rule of lenity requires that any ambiguity arising from the applicable law in a criminal case must be resolved in favor of the defendant and that Chevron deference must yield to lenity where a statute has both criminal and administrative application.This Comment will examine the impact on the enforcement of the federal securities laws by the Commission and the Department of Justice ("DOJ") and whether Chevron deference should be required to give way to the rule of lenity where a Commission rule or statute has both criminal and administrative application, specifically Section 1 0(b), Rule lOb-5, Rule lOb5-1, and Rule 10b5-2. This Comment will also consider how the application of the rule of lenity will affect the national market system and the public investors.