Rapid Results: ICAN's Strategic Approach Puts Regulatory Agencies on Notice

April 22nd, 2025

Dear ICAN Partners,

It's been another busy couple of weeks for ICAN, as our efforts to restrain the SEC continue to gain momentum. I’m pleased to share the good news of our most recent wins with you today.

While some anticipated that a change in Washington earlier this year would resolve issues of regulatory overreach, our recent cases demonstrate exactly what we predicted in December: "Changes in political leadership rarely slow the steady expansion of regulatory enforcement." This institutional understanding of how regulatory agencies truly operate—regardless of who sits in the Chair's office—is precisely why we've continued to ramp up our direct litigation and watchdog efforts throughout this transition period, ensuring we can defend those small investors and entrepreneurs unfairly impacted by ongoing SEC overreach.

The two new cases I'll share today further confirm the effectiveness of our strategic approach. Even with new leadership in place, the agency's day-to-day operations continue largely unchanged, with career staff pursuing the same enforcement approaches and priorities as before. This institutional inertia highlights precisely why ICAN's strategic litigation approach remains essential—collecting judicial wins to put guardrails on regulatory authority regardless of who is in office. These recent victories reinforce the value of the comprehensive reform recommendations we released earlier this year, which offer a roadmap for the structural changes needed to bring lasting improvement to the regulatory landscape.

Support from our network makes our work—and wins—in these cases possible. 

In gratitude, 

Nick Morgan

Founder and President of ICAN

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Jamie Quick: Seeking Justice, Charged Interest

 Last Monday, ICAN secured a significant victory for our newest client, Jamie Quick, a relief defendant who had never been accused of any securities violations. The judge took just two business days to return a judgment in favor of the aptly named Ms. Quick. 

Ms. Quick is one more example of an everyday American who found herself inadvertently caught up in the SEC’s regulatory labyrinth. After her ex husband used her brokerage account to engage in an alleged trading scheme without her knowledge, Ms. Quick, who was never accused of fraud or securities law violations, was ordered to return (or "disgorge") $44,159 from her account – funds Ms. Quick had no reason to suspect might be problematic and that she had already spent by the time the SEC took action. Then, to add insult to injury, the SEC went after Ms. Quick for an additional $8,826 in prejudgment interest that covers the time period during which she was defending herself against the original charges. 

In relentlessly pursuing the prejudgement interest, not only did the SEC blatantly flout the limits placed on it by the United States Supreme Court in Liu v SEC, it also attempted to impose what amounted to a due process tax on Ms. Quick for her decision to exercise her constitutional right to fight the SEC’s original charges rather than simply settling. In the process, the SEC expended a shocking amount of taxpayer-funded government resources, including the expensive time of multiple senior attorneys, all in pursuit of what, for the SEC, is a nominal sum from someone not even accused of wrongdoing. Such excessive punitive actions create a chilling effect, discouraging individuals from defending themselves even when they have legitimate legal grounds to do so.

Fortunately for Ms. Quick, who had exhausted her resources in fighting the original ruling, ICAN was there to step in and halt the government’s attempt to steamroll her. After ICAN filed our opposition brief on Friday, April 11, Judge Richard G. Stearns ruled in our favor on Monday, April 14, writing: 

"The record indicates that Quick's then-husband, Hernandez—i.e., not Quick herself—directed the relevant trading in Quick's account, and the SEC has failed to identify any specific victim(s) of that trading such that fairness requires prejudgment interest to make investors whole."

In addition to relieving our client of the burden of paying $8,826 interest, the judge’s ruling - which notes the SEC’s failure to identify any specific victims of the trades in question – opens the door for ICAN to potentially challenge the earlier $44,159 ruling. 

While headlines often focus on high-profile cases, it is in these seemingly minor cases that the agency quietly attempts to expand its powers beyond statutory limits. We encourage you to visit our case page to understand the true significance of this "small" case in our broader strategy to establish legal guardrails against SEC overreach. But, for now, we invite you to join us in celebrating the victory of another everyday American who, thanks to the generous support of our donors, was able to successfully stand up to the governmental goliath and put the SEC on notice that the days of pushing around small investors and entrepreneurs with impunity are over. 

Interestingly, my LinkedIn post about this case drew comments suggesting that we unfairly criticized staff for doing their jobs. Drawing on my experience as a former SEC employee, I responded that this isn't about attacking individual staff members but rather highlighting a systemic issue: 

"It is within the staff's ability to go back to the Commission to seek a modification of what was authorized two years ago. That should have happened here. Lawyers have an ethical duty to keep their client updated on material developments in the case. The staff is counsel to the Commission and should have updated the client rather than spending scarce resources chasing $8k in prejudgment interest from a relief defendant where the staff was also unable to identify victims." The judge's swift ruling—less than one business day after our filing—confirms this was not a close call.

You can view the post and subsequent thread here.

Challenging FINRA's Constitutional Overreach Through Regulatory Delays

We also saw quick action on an application ICAN filed with the SEC on behalf of shareholders of Entrex Carbon Market, Inc., challenging FINRA's 15-month delay in processing routine corporate actions. This is a novel approach on many fronts to push for regulatory accountability from quasi-governmental bodies like FINRA that too often operate with impunity despite ostensibly being under the supervision of the SEC. 

Despite Entrex providing all required documentation for the requests in December 2023, FINRA has neither processed the company's name change, stock symbol change, and stock split requests nor issued a formal deficiency notice that would allow for administrative appeal.

From our Press Release:

"FINRA's unprecedented delay has created significant market confusion and directly harmed shareholders by preventing the company from conducting business under its legally registered name," noted ICAN President Nicolas Morgan. "This case raises serious questions about regulatory accountability and the constitutional boundaries of delegated authority."

This application highlights how regulatory bodies sometimes hurt the very investors they're charged with protecting. Law360 has already recognized the significance of this case with its article "SEC Urged To Look At FINRA's 'Unprecedented' Review Delay," published on April 10.

We requested in our application that the SEC order FINRA to issue a final determination within 30 days and implement structural reforms to prevent similar delays for other issuers. We were pleased to be notified on April 11 (just three days after our filing) that the SEC had ordered FINRA to prepare a record of the underlying events in two weeks – this, after our clients had received nothing but silence for well over a year. 

Our Strategic Approach Continues

 

In addition to representing yet more everyday Americans victimized by regulatory overreach, these cases also exemplify ICAN's core strategy: identifying opportunities to establish legal guardrails through strategic litigation. By challenging regulators in cases where they overstep their authority—whether pursuing punitive measures against innocent parties or creating regulatory limbo through procedural delays—we're building the foundation for true long-term reform. 

As we stated earlier this year, ICAN remains prepared to take good advantage of the anticipated positive shift in the regulatory landscape to accelerate SEC reform while being clear-eyed about the fact that such reform will require more than political change at the top.

The SEC has filed hundreds of cases annually for years, many still winding through the legal process. This "long tail" of regulation through enforcement makes ICAN's direct litigation efforts crucial, regardless of any reforms under the new administration.

Supporters like you make this possible through generous donations and sharing our work with your own networks. 

Join Our Growing Movement

 

Now is a great time to support ICAN's mission to defend small investors and entrepreneurs, while promoting fairer and more accessible capital markets for all Americans.

Here's how you can make an immediate impact:

• Make a tax-deductible donation today to directly support our pro bono legal representation of small entrepreneurs and investors who can't afford to fight back against SEC overreach.

• Share this newsletter on social media to help amplify our message about creating fairer capital markets with this link. 

As the momentum builds and our influence grows, your involvement—whether through financial support, sharing our message, or connecting us with others—directly strengthens our ability to build lasting guardrails against regulatory overreach that will benefit all Americans.

If you'd like to discuss other ways to support our mission or learn more about our cases, please contact us at info@icanlaw.org.