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CALIFORNIA CORPORATE & SECURITIES LAW

Ninth Circuit Accords Chevron Deference To The SEC, What Would Judge Gorsuch Say?

Last week, I noted that Judge Gorsuch has expressed a certain skepticism of Chevron deference.  The next day, the Ninth Circuit Court of Appeals held that the Securities and Exchange Commission’s interpretation of Section 19(d)(2) of the Securities Exchange Act is entitled to Chevron deference. Sharemaster v. United States SEC, 2017 U.S. App. LEXIS 1827 (9th Cir. Feb. 2, 2017).  That statute authorizes the SEC to review an “final disciplinary sanction” imposed by a registered securities industry self-regulatory organization, including the Financial Industry Regulatory Authority.  The case arose when the FINRA imposed a $1,000 late fee on a broker.  The broker paid the fine in order to obtain a lifting of FINRA’s suspension and then sought review by the SEC.  The SEC, however, found that that Section 19(d)2) permitted review of only “live” disciplinary sanctions.  In an opinion penned by Judge Consuelo María Callahan, the Ninth Circuit held that the SEC’s interpretation was entitled to deference.  However, the broker, who was appearing pro se, persuaded the panel that the SEC unreasonably decided that the monetary penalty imposed by FINRA was not a sanction and thus not a live disciplinary sanction.

Pro se or propria persona?

The Ninth Circuit Court of Appeals granted the broker’s “pro se petition for review”.  The Court noted that the broker could appear pro se because it was a sole proprietorship.  “Pro se” is, of course, Latin phrase meaning on behalf of himself/herself/itself.  Lawyers and courts also refer to a litigant appearing “pro per”.  This is short for “propria persona” which means one’s own person.  Which is correct?  The California legislature uses both terms.  See, e.g., Cal. Code Civ. Proc. § 2025.510(h) (“The requesting attorney or party appearing in propria persona shall . . .”) and Cal. Code Civ. Proc. § 575.2 (“a party represented by counsel, or a party if in pro se . . .”).

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