SEC, Finra, Disciplined Consultant Quizzed on Jarkesy Case (1)

Judges on the Sixth Circuit appeared intrigued at oral argument Monday by the substance of a financial firm owner’s challenge to a private regulator’s sanctions and the SEC order sustaining them.

But the US Court of Appeals for the Sixth Circuit panel questioned attorneys for the Securities and Exchange Commission, the Financial Industry Regulatory Authority, and consultant Eric Smith with questions about Smith’s failure to raise a key precedent before the commission issued its order.

That precedent, the US Supreme Court’s SEC v. Jarkesy decision, was issued about two months before the SEC sustained Finra’s decision to impose a securities ...