Amicus Briefs
Alpine Securities Corporation FINRA
CASE SUMMARY
FINRA openly admits to being a private corporation, yet it investigates, fines, and strips the livelihoods of hundreds of securities brokers and firms every year without any accountability to the President or meaningful oversight by a presidentially appointed government officer. NCLA represented Texas accountant Michelle Cochran in our 2023 Cochran v. Securities and Exchange Commission victory at the Supreme Court, which included securing a Fifth Circuit panel’s injunction pending appeal that was essential to meaningful review of her case. The Supreme Court should likewise enjoin the FINRA prosecution that irreparably harms Alpine Securities pending judicial review to prevent this unconstitutional use and abuse of executive power.
FINRA regulates the securities brokerage industry subject to rulemaking oversight by SEC, but the agency does not provide any meaningful direction or supervision of FINRA’s enforcement activities. A panel of the U.S. Court of Appeals for the D.C. Circuit wrongly declined to fully enjoin FINRA’s enforcement proceeding against Alpine Securities pending review of the constitutionality of its enforcement regime. If FINRA is a private entity as it claims to be, and not a “state actor,” it is not bound by most constitutional restraints when it investigates, prosecutes, and punishes alleged wrongdoers. But that would mean FINRA violates both Article II of the Constitution, which prohibits empowering private law enforcement without close Executive Branch supervision, and the “private nondelegation doctrine,” a vital judicial principle that reserves binding federal power for the federal government alone. FINRA cannot have it both ways, evading the Constitution’s appointment, removal, due process, and jury trial requirements by claiming to be a mere private actor while simultaneously wielding vast, unsupervised governmental power.