Sacks
Sacks v. Securities & Exchange Commission
Opinion
Lead Opinion
Thomas, J.
Richard Sacks filed a petition for review challenging a rule proposed by the Financial Industry Regulatory Authority and adopted by the Securities and Exchange Commission. The rule prohibits non-attorneys who have been banned from the securities industry from representing parties in securities-related arbitration. Sacks argues the rule is impermissibly retroactive. We agree and hold that the rule cannot be applied retroactively.
I
The Financial Industry Regulatory Authority 1 (“FINRA”) is a “self-regulatory organization” under the Securities Exchange Act. See 72 Fed. Reg. 42169 (Aug. 1, 2007); 15 U.S.C. §§ 78c(a)(26), 78s(b). It is “responsible for regulatory oversight of all securities firms that do business with the public; professional training, testing and licensing of registered persons; [and] arbitration and mediation....” Id. at 42170. To achieve its objectives, FINRA may propose rules aimed at. governing its member firms and associated individuals. See 15 U.S.C. § 78s(b)(l). The proposed rules are subject to approval by the Securities and Exchange Commission’s Division of Market Regulation. See id.; 17 C.F.R. § 200.30-3 (a)(12).