SEC Ordered Postponement of Administrative Proceeding Pending SCOTUS Decision

On April 30, 2024, the Commission issued an order postponing its administrative proceeding against Edward Hackert, a partner at Marcum LLP. On January 18, 2024, the Commission issued an order instituting proceedings (“OIP”) against Hackert alleging audit failures and seeking civil penalties pursuant to Section 8A of the Securities Act of 1933, Sections 4C and 21C of the Securities Exchange Act of 1934, and Commission Rule of Practice 102(e). Shortly thereafter, Hackert filed an action in the Southern District of New York (“SDNY”), seeking to enjoin the Commission from continuing its proceeding. Then, at a conference in the SDNY on April 4, 2024, the court, without prejudging the merits of the case, “expressed its view that the Commission should voluntarily stay the administrative proceeding against Hackert until the Supreme Court decides SEC v. Jarkesy.” No. 22-859, 2023 WL 4278448 (June 30, 2023) (cert. granted).

On April 11, 2024, the parties to the proceeding filed a joint motion with the Commission to stay the proceedings. In response to the motion, the Commission postponed the proceeding until 30 days after the issuance of the Supreme Court’s decision in Jarkesy. In support of its decision, the Commission noted that a “federal district court has expressed the view that the Commission should voluntarily stay this specific proceeding.” The Commission further noted that the proceeding against Hackert was initiated under Section 8A of the Securities Act, “which authorizes the Commission to impose civil penalties,” and that the constitutionality of such statutory provisions is the first question presented in Jarkesy.

The SEC order is available here.