Washington, D.C., June 19, 2026 (GLOBE NEWSWIRE) -- Mark Cuban and prominent legal advocacy groups have submitted amicus curie briefs supporting the New Civil Liberties Alliance’s petition for the U.S. Court of Appeals for the Sixth Circuit to rehear Eric S. Smith v. U.S. Securities and Exchange Commission and Financial Industry Regulatory Authority. This case challenges punitive sanctions against NCLA client Eric S. Smith—all imposed administratively without any Article III jury trial. A majority of the Sixth Circuit panel acknowledged SEC’s likely violation of Mr. Smith’s constitutional right to a jury trial in an Article III court. But the full panel still upheld the sanctions imposed by misconstruing the Securities Exchange Act as taking away its power to address that constitutional violation solely because Mr. Smith did not first exhaust that argument by complaining to SEC about it futilely. NCLA thanks the amici for standing up against this profound injustice, which conflicts with the Supreme Court’s 2024 SEC v. Jarkesy ruling and its 2023 decision in NCLA’s Axon/Cochran victory.
Excerpts of the briefs filed by amici curiae follow:
“For new and smaller firms, the choice between an administrative proceeding weighted toward the agency and a potentially ruinous penalty is a false one for which the frequent rational response is to settle on the SEC’s terms, roughly calculating that this is the least bad outcome versus, say, hundreds of thousands in penalties (disguised as disgorgement or restitution) and/or a years-long ban from the industry. Because smaller respondents can least afford to litigate twice—once before the agency to ‘preserve’ every conceivable constitutional objection, and again in an Article III court to actually vindicate one—the panel’s exhaustion rule prices the Seventh Amendment beyond the reach of precisely those litigants who need it most. Established incumbents can absorb agency adjudication as a cost of doing business; new entrants must treat it as an existential risk and will rationally trim their ambitions accordingly—or settle on whatever nonfatal terms are offered.”
— Mark Cuban
“[Smith’s constitutional claims] do not involve an exercise of SEC’s discretionary power and they do not present a question allowing for SEC to apply its ‘special expertise.’ .... Nor does exhaustion promote judicial efficiency here—SEC has no power or authority to correct a constitutional error in its structure and exhaustion would produce nothing useful for subsequent judicial consideration that could not be presented in briefing on appeal. ... There is no ‘complex or technical factual context’ that requires SEC’s expertise.”
— Pacific Legal Foundation
“Suppose law enforcement officers conduct an unreasonable search, seize evidence, and present it at a criminal trial. Under the panel’s exhaustion logic, the defendant’s suppression motion would be barred unless he had previously argued to the officers, before the search was completed, that the search violated the Fourth Amendment. .... No court has ever suggested such a precondition. The suppression remedy is not contingent on an advisory exchange with the officers in the field.”
— Investor Choice Advocates Network (ICAN)
“Smith’s constitutional challenges based on his right to a jury trial before an Article III judge are challenges to the authority of the SEC to hear his case. As such, Smith brings a challenge to the SEC’s subject matter jurisdiction, which is not waivable, and may be considered on appeal even if not raised below.”
— Pioneer New England Legal Foundation
NCLA released the following statement:
“FINRA’s unconstitutional juryless disciplinary machinery operates outside of our Article III Judicial Branch and without the Seventh Amendment jury trials the Supreme Court required in the Jarkesy case. NCLA appreciates Mr. Cuban, Pacific Legal Foundation, ICAN, and Pioneer New England Legal Foundation’s amicus briefs. They explain both the necessity of having constitutional challenges decided in real courts and the real-life, economic pressure to capitulate when small businesses are threatened with years of non-judicial, juryless regulatory enforcement proceedings before they can ever be heard by a court.”
— Russ Ryan, Senior Litigation Counsel, NCLA
For more information visit the case page here.
ABOUT NCLA
NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.
Joe Martyak New Civil Liberties Alliance 703-403-1111 joe.martyak@ncla.legal