Burr & Forman

10.7.2016   |   Blog Articles, MSRB, Securities Litigation

6th Circuit Orders Pay-to-Play Challenge to Merits Panel

The Sixth Circuit this week declined the SEC’s request to dismiss a Constitutional challenge to the new MSRB pay-to-play rules. Instead, the Court ordered the case to a merits panel for consideration. The Republican parties of Tennessee, Georgia and New York are challenging the regulations in consolidated actions.

The SEC argued that its tacit “deemed approval” of new MSRB pay-to-play rules didn’t constitute agency action. The SEC’s “no we didn’t” argument was an attempt to avoid judicial review of the agency’s [in]action that allowed the rules to become effective. I discussed the issues — and the silliness of some of these arguments — in August, here.

The Sixth Circuit held the issues were questions of first impression under new statutes and were too important to yield a summary dismissal of the case, so it referred the motion to the full merits panel.

Principal briefs for the Petitioners challenging the regulations are due November 16, with the SEC’s opposition due December 19.

Tennessee Republican Party, et al. v. United States Securities and Exchange Commission, Nos. 16-3360/3732 (6th Cir. Oct. 4, 2016)(Doc. 36-1).


Thomas K. Potter, III (tpotter@burr.com) is a partner in the Securities Litigation Practice Group at Burr & Forman, LLP. Tom is licensed in Tennessee, Texas and Louisiana. He has over 30 years’ experience representing financial institutions in litigation, regulatory and compliance matters. See attorney profile. © 2016 by Thomas K. Potter, III (all rights reserved).

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