TRUMP CAN BE THE NEXT JUSTICE RIGHTS LEADER By B.Z. Kabala

The SEC exists for a simple reason: investors deserve fair markets, and bad actors shouldn't get a free pass. Most of the time, the agency's enforcement work advances that mission. But under the Biden administration's aggressive regulatory agenda, a troubling drift took hold in several corners of the Commission - an impulse to stretch theories, pressure defendants, and file cases first, then sort out whether the case truly holds up.
The record now speaks for itself. Federal courts have sanctioned the SEC for bad faith conduct, rejected its novel legal theories as "untenable," and found that the agency used "layers of false statements" to obtain extraordinary relief it was never entitled to. The Supreme Court itself stepped in - twice in two days - to curtail an agency that had grown accustomed to making its own rules, running its own courts, and silencing those who dared to push back. These are not allegations from defense attorneys. They are findings from federal judges and the highest court in the land.
Biden administration policies actively encouraged this overreach by prioritizing enforcement volume and novel legal interpretations over careful application of existing law. Talk to defense attorneys, former regulators, or market participants and you hear a consistent story: internal incentives rewarded aggressive enforcement even when the evidence was thin or the legal theory was a reach. That's not just unfair to the targets of investigations. It's corrosive to the credibility the SEC depends on to police markets effectively.
When the goal becomes the win
Enforcement has always required grit. The problem is what happens when grit turns into tunnel vision - when closing matters and enforcement numbers start to matter more than asking honestly whether the facts support the theory and whether the remedy fits the conduct. This shift was amplified by the Biden administration's directives that emphasized aggressive pursuit of cases, often at the expense of due process and sound legal grounding.
A federal judge's words: "Gross abuse of power"
The clearest documented example of Biden-era SEC overreach did not occur in Washington - it occurred in a federal courtroom in Utah. In SEC v. Digital Licensing Inc., d/b/a DEBT Box, et al., No. 2:23-CV-00482 (D. Utah), the SEC obtained an emergency temporary restraining order, froze company assets, and brought operations to a halt - all based on claims a federal judge later found to be "some combination of false, mischaracterized, and misleading."
Chief Judge Robert Shelby issued an 80-page ruling finding that the SEC acted in "bad faith" and committed what he called a "gross abuse of power." The court found the agency had used "layers of false statements" in seeking and defending the TRO. The judge wrote that the Commission "not only repeated and affirmed its misrepresentations in the face of contrary evidence, it presented new falsehoods to the court in an effort to subtly shift from its previous misrepresentations without acknowledging its previous errors."
The court dismissed the case and ordered the SEC to pay over .8 million in attorneys' fees and costs. The fallout was severe enough that the SEC subsequently announced it would close its Salt Lake City regional office entirely.
This is not a matter of contested legal interpretation. It is a federal judge documenting, in 80 pages, that a federal agency lied to a court to destroy a business it had not yet proven was fraudulent. That is the Biden enforcement culture reduced to its starkest form.
Rewriting the rules midstream: The SolarWinds precedent
Under Biden, the SEC did not just pursue aggressive enforcement - it pursued novel enforcement, stretching statutes beyond their plain meaning and daring courts to stop them. Courts did.
In SEC v. SolarWinds Corp. & Timothy G. Brown, No. 1:23-cv-09518-PAE (S.D.N.Y. 2024), the SEC sued a software company and - for the first time in the agency's history - personally charged its Chief Information Security Officer (CISO) over cybersecurity disclosures. The Commission's theory was sweeping: that deficiencies in the company's cybersecurity controls violated the Exchange Act's "internal accounting controls" provision.
U.S. District Judge Paul Engelmayer, in a 107-page opinion issued July 18, 2024, dismissed most of the SEC's case. The court called the internal accounting controls theory "untenable," ruling that the SEC's statutory authority "does not extend to corporate cybersecurity." It also dismissed fraud claims based on blog posts and podcasts as non-actionable "corporate puffery." Two sitting SEC Commissioners - Hester Peirce and Mark Uyeda - had sharply criticized the theory even as it was being pursued. The agency ultimately dropped the entire case in November 2025.
This is what "regulating through litigation pressure" looks like: filing a first-of-its-kind case against an individual executive, using a novel legal theory that two of your own commissioners called illegitimate, forcing years of litigation and reputational damage, then watching a federal judge dismantle the theory as "ill-pled." Aggressive enforcement is one thing. Rewriting the rules midstream is another.
The right to speak, the right to a jury
One of the most corrosive features of Biden-era SEC enforcement was what happened to people who spoke out - who published research, raised questions, disagreed publicly, or simply refused to settle. The agency wielded a weapon few understood: the administrative court system. When the SEC chose to pursue a target in its own in-house tribunal rather than federal court, it was simultaneously the prosecutor, the judge, and the appellate authority. Defendants faced an agency that had historically won the vast majority of its in-house cases - not because the facts were always on its side, but because the forum was.
This is not a legal abstraction. When the SEC targets someone who has criticized a company, raised concerns publicly, or simply caught the agency's attention by speaking, the choice of forum - its own court versus a federal jury - determined whether that person had any real chance of winning. The chilling effect was deliberate and powerful: speak out, and you may find yourself in a tribunal where the house always wins.
The Supreme Court ended that in SEC v. Jarkesy, 603 U.S. 109 (2024). In a 6-3 decision issued June 27, 2024, Chief Justice John Roberts held that when the SEC seeks civil penalties for securities fraud, the Seventh Amendment entitles the defendant to a jury trial in federal court. The agency can no longer forum shop. It can no longer route a target into its own in-house proceeding to strip away the right to a jury, the Federal Rules of Evidence, and the protections of an independent Article III judge.
The practical consequences are significant. A federal jury trial means real discovery against the government. It means strict evidentiary standards. It means the SEC must persuade twelve citizens - not its own administrative law judges - that a defendant committed fraud. It means the cost of overreach lands on the agency, not just the target. Prior to Jarkesy, the SEC used its administrative forum as a settlement cudgel: defendants who refused to settle faced a tribunal stacked against them. After Jarkesy, the SEC must be selective. Cases without solid evidence are harder to bring when a jury will decide them.
Then, one day later, came Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which overturned the decades-old Chevron doctrine. Under Chevron, courts deferred to a federal agency's interpretation of ambiguous statutes - meaning when the SEC invented a novel legal theory, judges were largely required to accept it. No more. Courts now decide independently what securities statutes mean. This is why the SolarWinds "accounting controls = cybersecurity" theory failed: a court free from deference could look at the statute plainly and call the theory what it was - a reach beyond the law's actual text.
Together, Jarkesy and Loper Bright represent a structural dismantling of the enforcement architecture the Biden SEC depended on: the ability to invent law through novel theories (Chevron deference) and punish targets who resisted through a stacked tribunal (the ALJ system). Courts have now stripped both weapons. The question for the Trump era is whether the reforms go further - institutionalizing the changes so that the next administration cannot simply rebuild what the courts tore down.
Speaking out - in markets, in public, or in court - should not be a trigger for government retaliation. When an enforcement agency uses the fear of regulatory power to silence critics, it is not protecting investors. It is protecting itself. Under President Trump, the SEC has an opportunity to codify the constitutional corrections the Supreme Court made and build an enforcement culture where the right to speak and the right to a fair hearing are treated as features of the system, not obstacles to be routed around.
Credibility still matters
Beyond novel theories and procedural overreach, the Biden-era SEC also raised serious questions about witness credibility. In at least one regional enforcement action, the agency built meaningful allegations around testimony from a witness with a prior perjury conviction - a fact that would give most federal judges and juries serious pause.
Witnesses come with complications. But someone who has been found by a court to have lied under oath is different. In most courtrooms, that testimony would be treated with caution and checked carefully against independent evidence. An SEC enforcement action shouldn't lower that bar simply because the forum is civil - yet the pressure from above under the previous administration sometimes led to exactly that.
When the government looks willing to trade credibility for convenience, it invites the suspicion that the win - not justice - has become the objective. That's a dangerous perception for any regulator, and a damaging one for the SEC. It is also, post-Jarkesy, a more costly one. A jury that hears a perjured witness may not just discredit that testimony - it may discredit the government's entire case.
What overreach costs everyone
When enforcement overshoots - as it frequently did under Biden administration policies - the damage doesn't stop with the defendants. It spreads through the market, and it doesn't take long to show up.
Trust erodes among investors, issuers, and the public.
Courts grow skeptical and the SEC's methods come under harsher scrutiny - as seen in DEBT Box, SolarWinds, and the Supreme Court's Jarkesy ruling.
Resources get misallocated, pulling attention from clear-cut fraud to marginal or speculative cases.
Public speech is chilled - market analysts, short sellers, and whistleblowers self-censor when they fear that speaking out makes them a target.
The SEC's legitimacy doesn't come from stacking up settlements. It comes from persuading the public and the courts that it acts with discipline: fairly, transparently, and within the rule of law. The Biden administration's approach undermined that legitimacy. When field offices push past those boundaries, they don't just jeopardize individual cases. They make future enforcement harder, because every next case is met with a little more cynicism and a little less trust.
What should change - and how President Trump can fix it
Congress, the SEC's Inspector General, and new Commission leadership under President Trump should take a hard look at enforcement practices and then follow through with meaningful reforms. President Trump has already demonstrated a commitment to reducing regulatory overreach and restoring balance to federal agencies. He can cement that legacy at the SEC by appointing leadership that prioritizes disciplined, targeted enforcement over volume-driven aggression.
The new SEC leadership under Chair Paul Atkins has already signaled a "back to basics" approach - focused on genuine harm, traditional securities fraud theories, and pulling back from novel theories of liability. That is the right direction. But signals must become structural reform. The constitutional corrections made by the Supreme Court in Jarkesy and Loper Bright must be institutionalized so they cannot be undone by the next administration that decides enforcement volume matters more than justice.
That means asking basic questions: Are novel legal theories being vetted consistently before filing? Are supervisors rewarding speed and volume over accuracy? Are defendants - especially those who have spoken out publicly - getting fair notice of the claims and a real opportunity to respond before reputations are damaged? Is the choice of forum being made to serve justice, or to avoid a jury?
Oversight isn't an attack on enforcement. It's how enforcement stays legitimate. Under President Trump, the SEC can return to its core mission of protecting investors through fair, predictable, and law-abiding practices - rather than the expansive, punitive approach fostered during the Biden years.
Investor protection takes strength. It also takes restraint - the willingness to narrow a theory, corroborate a witness, face a jury, and walk away when the facts don't cooperate. The DEBT Box court put it plainly: the Commission used its "special standing as a federal agency" to obtain relief it would not have been entitled to had it been candid. That is a betrayal of the public trust the SEC is meant to protect.
The SEC has the authority to enforce the law. Under President Trump, it should exercise that authority in a way that makes the public more confident in the markets - and not more fearful of the regulator. The right to speak freely in a marketplace of ideas and the right to a fair hearing before a jury of peers are not obstacles to good enforcement. They are its foundation.
Key Cases Cited
SEC v. Digital Licensing Inc., d/b/a DEBT Box, et al., No. 2:23-CV-00482 (D. Utah) - Case dismissed; SEC sanctioned .8M+ for bad faith conduct and misrepresentations to obtain TRO; Chief Judge Shelby found "gross abuse of power." SEC closed Salt Lake City office in aftermath.
SEC v. SolarWinds Corp. & Timothy G. Brown, No. 1:23-cv-09518-PAE (S.D.N.Y. July 18, 2024) - Court dismissed most of SEC's claims; rejected novel "internal accounting controls" cybersecurity theory as "untenable." SEC voluntarily dismissed remaining claims Nov. 2025.
SEC v. Jarkesy, 603 U.S. 109 (2024) - Supreme Court held 6-3 that the Seventh Amendment entitles defendants to a jury trial in federal court when the SEC seeks civil penalties for securities fraud; ended the SEC's use of in-house administrative tribunals for fraud actions.
Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024) - Supreme Court overturned the Chevron doctrine; federal courts no longer defer to agency interpretations of ambiguous statutes, stripping the SEC of deference for novel enforcement theories.
SEC v. Ripple Labs, Inc., No. 20-cv-10832 (S.D.N.Y. 2023) - Court rejected SEC's position that secondary-market XRP sales constituted securities offerings; major defeat for regulation-by-enforcement approach to novel asset classes.

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Dr. Boleslaw "Bolek" Z. Kabala is a political scientist appointed Assistant Professor of Political Science in the Department of Government, Legal Studies, and Philosophy at Tarleton State University (Tarleton) in Stephenville, Texas. In 2024, Tarleton recognized him with the College of Liberal & Fine Arts (COLFA) Outstanding Junior Faculty Award.

This release was published on openPR.