Washington, D.C., June 11, 2026 (GLOBE NEWSWIRE) -- The New Civil Liberties Alliance has petitioned the U.S. Court of Appeals for the Sixth Circuit for panel or en banc rehearing of its Eric S. Smith v. U.S. Securities and Exchange Commission and Financial Industry Regulatory Authority case challenging punitive sanctions against NCLA client Eric S. Smith. FINRA imposed the sanctions and SEC upheld them—all administratively without any Article III jury trial.
A majority of the Sixth Circuit panel in this lawsuit acknowledged SEC’s likely violation of Mr. Smith’s constitutional right to a jury trial in an Article III court. But the full panel misconstrued a provision of the Securities Exchange Act as divesting the court of any power to address or remedy that constitutional violation solely because Mr. Smith did not first complain to SEC about it.
NCLA asserts that because only Article III courts—not SEC—have the competence, expertise, and authority under the Constitution to adjudicate Mr. Smith’s constitutional arguments, he had no obligation or reason to seek SEC’s advisory opinion on the Constitution before seeking judicial relief. The panel’s ruling conflicts with precedent, including the Supreme Court’s 2023 decision in NCLA’s Axon/Cochran victory, and raises profound separation-of-powers concerns.
NCLA released the following statement:
“Agencies enforce the law while Article III courts interpret our Constitution and laws. Targets of SEC law enforcement should not have to beg their prosecutors for a nonbinding advisory opinion about their constitutional rights before seeking Article III judicial relief to protect those rights.”
— 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
