The SEC's Case Was Unconstitutional From the Start. Now It Wants a Federal Court to Enforce Its Order Anyway.

Investor Choice Advocates Network and co-counsel Vartabedian Katz Hester Haynes file opposition challenging the SEC's attempt to enforce a constitutionally tainted order against a Texas retiree who harmed no one.

FOR IMMEDIATE RELEASE April 15th, 2026

Tyler, Texas — The SEC is in federal court in Texas seeking to collect nearly $450,000 from a retired financial professional, Tom Rose, a grandfather of eight, whose clients submitted sworn statements saying he never harmed them. ICAN has filed an opposition brief on behalf of Mr. Rose, telling the court what the SEC left out:

• The Supreme Court, in case after case over the last decade, has repeatedly confirmed that the constitutional foundations of this very proceeding were never sound.

• To make its case, the agency told the judge that Mr. Rose “willfully committed violations”—despite the fact that its own administrative judge found Mr. Rose had no intent to harm anyone.

• The agency failed to inform the court that it has already been garnishing Mr. Rose’s Social Security benefits.

Tom Rose spent fifty years in professional services—building high-tech companies and developing financial education programs for corporations and their employees, while forging strong client relationships built on trust. In 2010, he put that experience to work as a licensed independent life and health insurance agent in multiple states, helping clients use insurance products as part of their retirement planning. His clients trusted him. Today, he is retired in Plano, Texas, where he and his wife of more than 35 years are surrounded by five children and eight grandchildren—the life he spent 50 years building. Unfortunately, instead of enjoying the retirement he earned, Mr. Rose is now fighting to keep the SEC from taking it.

Our Client, Tom Rose

In 2017, the SEC brought an enforcement action against Mr. Rose for a registration violation. Despite the fact that Mr. Rose did not harm anyone and was acting on legal advice that the products he sold were not securities—and therefore not subject to SEC registration requirements—the SEC pursued him relentlessly. Several months into the proceeding, facing an in-house SEC tribunal that would later be found by the Supreme Court to be unconstitutional and unable to afford years of litigation against one of the most powerful regulatory agencies in the country, Mr. Rose partially settled the matter without admitting any wrongdoing, as many before him have done.

As ICAN’s brief in this case notes, and as the SEC’s own Director of Enforcement publicly acknowledged, the agency routinely used its in-house tribunal as leverage, threatening administrative proceedings until respondents settled. Like Mr. Rose, more than ninety percent of respondents capitulated rather than endure the process—victims of what Supreme Court Justice Neil Gorsuch has characterized as “regulatory extortion.”

Despite the administrative law judge finding that Mr. Rose had not acted with any intent to harm anyone—a finding that drove his civil penalty to the lowest possible tier and the minimum dollar amount within it ($3,750)—Mr. Rose was still ordered to pay an additional $297,360 in disgorgement, returning years of earnings he received from helping satisfied customers. That amount has since ballooned to $449,696.91 with accrued interest. And now the SEC has taken the case to federal court in the Eastern District of Texas, seeking to add additional teeth to its collection efforts—this, despite already garnishing Mr. Rose’s Social Security benefits and federal tax refunds for over two years, a fact it failed to share with the court in its initial filing.

The SEC’s selective presentation does not stop there. Over nearly a decade, a series of landmark Supreme Court decisions has confirmed that the constitutional foundations of the proceedings to which Mr. Rose was subjected were never sound. The SEC applied only one of those rulings to his case—the one it was forced to address. The rest it has never acknowledged.

In 2018, when the Supreme Court held in Lucia v. SEC that the agency’s administrative law judges had never been lawfully appointed, the SEC vacated Rose’s original decision and started over with a new judge. It has never acknowledged the defects that followed.

In 2022, the Fifth Circuit held in Jarkesy v. SEC that SEC administrative law judges are unconstitutionally insulated from executive oversight—meaning they answer to no one in a way the Constitution requires. And in 2024, without disturbing that holding, the Supreme Court ruled in SEC v. Jarkesy that the Seventh Amendment guarantees a jury trial in an Article III court when the government seeks civil penalties—the SEC’s own in-house tribunal cannot satisfy that requirement. Mr. Rose’s civil penalty was imposed by an administrative judge, without a jury, in precisely the process the Supreme Court confirmed that the Constitution forbids. In Jarkesy, the SEC’s order was thrown out entirely. Nothing changed for Mr. Rose.

Then there is the matter of disgorgement—the $297,360 the SEC is demanding Mr. Rose repay. In 2020, the Supreme Court held in SEC v. Liu that disgorgement must be for the benefit of victims. Mr. Rose’s order was declared final seven months after that ruling—without explanation, despite no victim being identified and no loss quantified. The SEC’s persistent effort to sidestep Liu has now brought it back before the Supreme Court. Sripetch v. SEC, to be argued April 20, 2026, will directly address whether the SEC may seek disgorgement when no investor was harmed—and its outcome may eliminate the principal monetary obligation the SEC is asking this court to enforce against Mr. Rose.

Against that backdrop, on April 14th, 2026, ICAN Law—together with co-counsel Vartabedian Katz Hester Haynes of Fort Worth, Texas—filed an opposition brief arguing that the court has multiple independent grounds to act: from outright denial of the SEC’s application, to fully vacating the underlying order on constitutional grounds—or, at a minimum, staying the proceedings pending the Supreme Court’s resolution of Sripetch v. SEC.

“The SEC ignored every Supreme Court decision that should have protected Tom Rose, and now it’s in federal court misrepresenting the record to a judge,” said Nicolas Morgan, Founder and President of ICAN and a former senior SEC trial counsel. “A federal court is not a collection agency for unconstitutional orders. That is exactly what the SEC is asking this court to be.”

"The SEC's demand that Mr. Rose pay hundreds of thousands of dollars is all the more arbitrary because it contrasts so starkly with the reduced payments sought against the co-respondents in the matter."  Toby Galloway, co-counsel at Vartabedian Katz Hester Haynes

View Court Filings Here

For more information about ICAN's work, visit www.icanlaw.org or contact: info@icanlaw.org

About ICAN: The Investor Choice Advocates Network (ICAN Law) is a nonprofit organization dedicated to breaking down barriers to entry to capital markets and pushing back against regulatory overreach. ICAN advocates for fair and transparent regulatory practices, ensuring all individuals have equal access to investment opportunities and due process in the financial markets.

Contact Information: Investor Choice Advocates Network (ICAN) Email: info@icanlaw.org Website: www.icanlaw.org