The “SEC’s Retreat” Has Been Greatly Exaggerated and Misunderstood
- Nicolas Morgan
- Oct 9
- 5 min read
SEC v. Barry sparked the start of ICAN. Here’s our bold, resource-intensive plan to take it to the Supreme Court.
October 9th, 2025
Dear ICAN Partners,
In recent months, some have suggested that the Securities and Exchange Commission (SEC) may finally be showing restraint—particularly after a string of courtroom losses and public criticism of its expansive enforcement approach.
Our cornerstone case, SEC v Barry, illustrates what ICAN knows too well – talk of the “SEC Retreat” is, at best, premature. And it is a valuable reminder of why we’re going to great lengths to work for change that will endure beyond any single administration. However, we can’t do that without the support of people like you, so today we want to provide you with insight into the critical nature of this case and our strategy to win.
In SEC v. Barry, the Commission’s staff continues to pursue a case that began a decade ago, stretching the definition of securities law so far that it would have incredible implications for what the agency can define as activities that render something a “security.” The SEC is seeking massive financial judgments against defendants who have never been accused of fraud or investor harm, and who are salespeople, not principals or executives, even though every investor in the case is expected to be made whole, and more.
What makes this so troubling is not just the theory, but the process.
Cases like this continue to move through the courts under the radar of the current Commission. What many people are not aware of is that there is no mechanism for the staff to pause and ask whether today’s Commissioners—the people actually leading the agency—still support the litigation. Once approved, these cases can proceed indefinitely, untethered from current policy or oversight.
That is why ICAN filed a petition last week, asking the Ninth Circuit for en banc review in SEC v. Barry — a strategic step in our path to taking this case to the Supreme Court. This case sits at the center of our mission and illustrates why litigation—not politics—is sometimes the best (or only) path to lasting reform.
We are proud to stand with our co-counsel, Igor Timofeyev, Alyssa Tapper, and Alec Sweet at Paul Hastings in continuing this more-than-decade-long fight for our clients. Because someone must remind the SEC that “broad coverage” does not mean boundless jurisdiction.
Let’s dive into why the case matters and the specific strategy we’re pursuing. You can also read the case background here.
Why This Case Matters
From the beginning, the SEC’s theory in Barry has been an attempt to erase the limits courts have previously placed on its authority. The agency insists that certain life settlement contracts—arrangements tied to life insurance policies—are securities, despite the D.C. Circuit Court of Appeals (twice) rejecting that view decades ago in the 1990s.
If the SEC succeeds, the consequences would be far-reaching:
1. Eroding precedent restraining SEC expansion
Reversing prior court decisions would give the agency a green light to extend its reach into new areas of commerce that Congress never intended it to regulate. Even if this administration doesn’t act on the opening, a future one surely will.
2. Disgorgement without fraud or harm
The SEC seeks ruinous judgments against individuals who relied on binding precedent and legal advice—despite no fraud, no deception, and no investor losses caused by these defendants.
3. The future of the Howey test
With most crypto-related SEC cases now settled or dismissed, Barry is the only remaining Howey case in a federal appellate court. Its outcome could determine how far the SEC’s jurisdiction extends into new markets and technologies for years to come.
The notion that the SEC staff has pulled back from aggressive enforcement is widely mischaracterized, and SEC v. Barry is a clear example of what is really happening unless we step in. For more than a decade, the agency has devoted extraordinary resources to pursuing these individual salespeople (destroying their lives and careers along the way) who had no reason to believe they were doing anything wrong. Their employer had received legal advice—based on binding precedent—that the life settlement products they sold were not securities. Expecting a salesperson to evaluate the situation differently is downright unreasonable—and the SEC knows it.
Yet the agency continues to press ahead, targeting these individuals not to protect investors but to secure a precedent expanding its Howey authority.
While their employer settled long ago, our clients Eric, Brenda, and Caleb have been brave enough to fight, and ICAN has been supporting them all along the way.
Why Litigation Is Often the Only Path to Real Reform
ICAN welcomes the SEC’s recent signals of a less adversarial approach toward entrepreneurs and emerging businesses. That’s progress—but it’s not permanence.
The SEC’s tone and priorities change with each administration. Without judicial guardrails, every shift in leadership risks a renewed expansion of power.
That’s why litigation is essential: it’s often what defines the constitutional “guardrails” the SEC must operate within.
By pushing this case forward, ICAN is working to ensure those limits are clear, enforceable, and lasting—regardless of who sits in the Commission’s chairs.
The Road Ahead—and How You Can Help
The Ninth Circuit’s recent ruling against us was a strategic loss. We knew from the start that in the Ninth Circuit, this case would face an uphill battle. But that was part of the process—laying the groundwork to reach the Supreme Court.
That’s why we have now petitioned for en banc review by a larger panel of Ninth Circuit judges. While we hope to persuade a majority of the judges on the panel, our purpose is also strategic: to draw out sympathetic opinions, to build a stronger record, and to rally amicus support. It is bold. It is resource-intensive. But for a case this important, it is necessary.
The SEC has limitless resources. ICAN does not. Taking a case like this to the Supreme Court is among the most demanding things we can do—but also among the most impactful.
By partnering with ICAN and investing in our work with a gift today, you can fuel the fight that will decide how far the SEC’s power can reach. Please stand with us as we press forward.
If you would like to discuss supporting our work, please do not hesitate to let me know. You can also donate now through the button below.
In gratitude,
Nick Morgan
Founder and President of ICAN
P.S. If you know colleagues, firms, or organizations that may want to file an amicus brief, please connect us. Broad support will be critical as we take this case forward.
