The SEC Violated His Rights, Ignored the Courts, and Misled a Judge. ICAN Is Setting the Record Straight.
- Nicolas Morgan
- Apr 16
- 7 min read
Four constitutional violations. A misled judge. A grandfather's Social Security garnished. This is our newest case.
April 16th, 2026
Dear ICAN Partners,
Imagine being told by a federal agency that you have to give back every penny you earned selling a product your customers loved—because the government took the position you should have been registered to sell it. Even though the product’s status as a "security" at all is a question that lawyers and courts have disagreed about for decades. Even though you had received legal advice that it was not.
Now imagine that same agency demanding you repay everything you ever earned from that work, when the law says it should have, at most, levied a modest fine.
Now imagine that nearly every aspect of how your case was handled has since been declared unconstitutional—and that the method the agency is using to demand the nearly half a million dollars it now claims you owe is so legally contested that the Supreme Court is hearing arguments about it next week. And that in asking a federal court to seize your assets, the agency somehow forgot to mention any of this.
Sounds like fiction. It isn't. It's the story of our newest client, Tom Rose.
Mr. Rose is a father of five and grandfather of eight, living in Plano, Texas, with his wife of more than 35 years. He spent fifty years working—building companies, educating financial professionals, and then helping people use insurance products as a part of their retirement planning. His clients trusted him. The majority of them said so in sworn statements. He wasn't a fraudster. He wasn't reckless. He was a licensed professional doing his job, acting on legal advice that the products he sold were not securities.
In 2017, facing an SEC enforcement action he couldn't afford to fight, Tom did what more than ninety percent of people in his position do: he partially settled—contesting only the amount he might have to pay, without admitting any wrongdoing. This is incredibly common because it is what happens when a government agency with unlimited resources turns the proceeding itself into the punishment. Supreme Court Justice Gorsuch has recognized this troubling dynamic in his concurring opinion in the Axon case.
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 nearly 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.
Nearly a decade later, Tom Rose is still fighting. The SEC has been quietly intercepting his Social Security benefits and tax refunds for over two years—twenty-eight separate intercepts totaling $14,477.70—but now they want him to pay the remaining disgorgement amount immediately, despite the fact that there are no victims to return it to and it would just go to an account at the Treasury. In making that request to the federal court, the agency told the judge that Mr. Rose "willfully committed violations." It did not mention that its own judge found he had no fraudulent intent. It did not mention the garnishments already taken from his Social Security. But there’s so much more they left out.
Without ICAN, the SEC’s misleading rendition of events would be the only version the judge ever heard. Here’s what we’re making sure goes on the record.
1. The judges were never lawfully appointed. In 2018, the Supreme Court held in Lucia v. SEC that the agency's administrative law judges had never been lawfully appointed—a defect so fundamental it required vacating Mr. Rose's original decision and starting over with a new judge. The SEC corrected that one. As our brief states: "Then it stopped. It has never acknowledged the other defects exist."
2. The judges couldn't be held accountable by anyone. 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. The Supreme Court affirmed in 2024. Mr. Rose's proceeding was never corrected.
3. He had a constitutional right to a jury trial—and never got one. Also in 2024, the Supreme Court ruled that the Seventh Amendment guarantees a jury trial in an Article III court in certain proceedings 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 Constitution forbids. In Jarkesy, the SEC's order was thrown out in its entirety. Nothing changed for Mr. Rose.
4. The disgorgement demand has no legal foundation. In 2020, the Supreme Court held in SEC v. Liu that disgorgement—the forced repayment of earnings—must be for the benefit of victims. Mr. Rose's order was declared final seven months after that ruling. No victim was identified. No loss was quantified. No explanation was offered. The SEC simply moved on—and continued to do the same in case after case since. That persistent effort to sidestep Liu will now bring the agency back before the Supreme Court this month. Sripetch v. SEC, argued April 20, 2026, will directly address whether the SEC may seek disgorgement when no investor was harmed. Its outcome may eliminate the principal monetary obligation at the heart of Mr. Rose's case. ICAN is involved in Sripetch as well—you can read about that here.
Tom Rose is not alone. He is the latest in a pattern ICAN has been fighting for years—regular people, following the law as they understood it, who harmed no one, yet find themselves pursued for massive amounts of money by an agency that knows they cannot fight back alone.
In SEC v. Barry, we represent Brenda Barry, Eric Cannon, and Caleb Moody—three sales professionals pursued for nearly a decade over products their employer had been advised were not securities. No fraud. No harmed investors. In SEC v. Padilla, the SEC named Jamie Quick as a "relief defendant"—a legal mechanism that allowed the agency to pursue someone it had never accused of breaking any law or harming any investor. She did not violate the law. She did not harm anyone. And J.D. Jordan, one of ICAN's earliest clients, passed away last year still fighting a disgorgement demand over an unproven technical violation his own lawyer told him was no violation at all. The SEC never accused him of fraud. It never claimed any investor lost money. He spent the final years of his life fighting an agency that refused to stop—and ICAN is now defending his legacy and the financial security he spent a lifetime trying to build for his family.
In every one of these cases, the SEC has pursued individuals without fraud, without victims, by sidestepping the Supreme Court's ruling in Liu that disgorgement must be for the benefit of victims. That persistence has now brought the agency back before the Supreme Court this month in Sripetch v. SEC—a ruling that could directly affect Tom Rose, our clients in Barry, Jamie Quick, and the Jordan family all at once.
This is the agency's strategy to expand its power. ICAN is pushing back.
What is this costing the rest of us?
The SEC is a federal agency funded by American taxpayers, created to protect investors and maintain the integrity of our markets. Cases like these are not that. There are years of agency resources, attorney hours, and taxpayer dollars spent pursuing individuals for technical violations—without fraud, without victims—that erode the confidence in participating in our markets. When financial professionals become familiar with how the SEC operates, they become unwilling to continue serving clients, innovating, or taking risks. Some leave the industry entirely. The markets that most need experienced and decent professionals suffer—and the investors who lose out are ordinary Americans trying to build a better financial future. This is not investor protection. It is the opposite of it. And it erodes the public trust that healthy markets depend on.
ICAN Fighting Back for Mr. Rose
On Tuesday, ICAN—together with co-counsel Vartabedian Katz Hester Haynes of Fort Worth, Texas—filed an opposition brief arguing that a federal court is not a collection agency for unconstitutional orders. We are asking the court to deny the SEC's application outright, vacate the underlying order on constitutional grounds, or, at a minimum, stay all proceedings pending the Supreme Court's resolution of Sripetch v. SEC.
Without ICAN, a federal judge would have heard only the SEC's version of Tom Rose's story—and rubber-stamped an order to seize his assets without ever knowing about the constitutional violations, the misrepresentation of the record, or the Supreme Court cases that should have protected him. That is true for Tom. It will be true for the next person in his position—unless ICAN is there to make sure the full record gets told.
If you are able, I ask you to help us stay in these fights. Your support funds not just the legal work, but the effort to make sure these stories are heard—in courtrooms, in the press, and by the people who need to understand what is happening to ordinary Americans at the hands of an unchecked agency.
With gratitude,
Nick Morgan
Founder and President of ICAN
P.S. Sripetch v. SEC is being argued before the Supreme Court next week on April 20, 2026. A ruling could finally draw a hard line on the SEC's ability to demand money from people when no investor was harmed—directly affecting Tom Rose, our clients in Barry, Jamie Quick, and the Jordan family. If Tom's story moved you, the best thing you can do right now is share it. Forward this email to someone who should know what the SEC is doing, or share it on social media. The more people who understand what is happening, the harder it becomes for the agency to keep doing it quietly.
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