Update: Supreme Court Petition Filed & Entrex Shareholders Win Against FINRA
- Nicolas Morgan
- May 1
- 5 min read
Our dual approach is working:
Sprint when we can, marathon when we must - all to protect market participants from regulatory overreach.
May 1st, 2025
Dear ICAN Partners,
The past few weeks have been extraordinarily productive for ICAN, with significant victories in our cases, including one for an innocent account holder pursued for prejudgment interest and another for Entrex Carbon Market shareholders. These rapid successes demonstrate our ability to be nimble and strategic, sprinting when opportunity allows while maintaining the marathon mindset necessary for enduring regulatory reform.
This balance of quick wins and long-term strategy is central to ICAN’s mission. While we're thrilled by the momentum building from these recent victories, we know that meaningful change often requires years of persistent effort through multiple rounds of litigation. Today, I want to share updates on two cases that reflect both aspects of our approach and ICAN’s crucial watchdog role: our Supreme Court petition in Mona v. Microbot Medical and our challenge to FINRA's egregious delays in processing Entrex's corporate actions.
In gratitude,
Nick Morgan
Founder and President of ICAN
Mona v. Microbot Medical: Taking the Fight to the Supreme Court
Last week, ICAN filed a petition for certiorari with the U.S. Supreme Court in Mona v. Microbot Medical. We’re asking the Court to review a lower court ruling against our client, Joseph Mona, an elderly grandfather whose financial security has been devastated by an outdated securities law. In the process, ICAN is challenging the Depression-era law, which has become a trap for countless everyday Americans, like Mr. Mona, who seek to improve their family’s financial situation through day trading.
Despite no allegations of insider trading or harm to any party, Mr. Mona faces a $480,000 disgorgement judgment after briefly exceeding 10% ownership in a small-cap stock while day trading for his retirement. To defend himself, he has already spent nearly $400,000 in legal fees, exhausting his resources and forcing him to take out a home equity loan, while his son pledged his house as collateral.
For more information on Mr. Mona’s case and Section 16(b) of the Securities Exchange Act of 1934, an antiquated law that has become a cash cow for predatory lawyers acting like “deputy SEC attorneys,” visit his case page here.
Our petition highlights a troubling issue of constitutional significance: whether plaintiffs must show actual harm to have standing in short-swing profit cases. In a previous case (Packer v. Raging Capital), the SEC filed an amicus brief in the Second Circuit supporting the position that short-swing profit plaintiffs should not have to show "tangible harm" to companies to obtain disgorgement. To support this claim, the SEC twice cited the Supreme Court's Gollust decision—but conspicuously omitted Gollust's explicit statement that "Art. III's requirement remains: the plaintiff still must allege a distinct and palpable injury to himself."
This selective citation effectively misled the court about fundamental constitutional standing requirements, an error that was repeated in Mr. Mona's case. In our petition, we've taken the unusual step of asking the Supreme Court to request the SEC's views through an amicus brief, giving the agency an opportunity to address this critical omission and clarify its position on this fundamental Article III standing question.
You can view the petition here.
Early losses can pave the way for transformative victories, particularly when cases reach higher courts where fundamental constitutional principles receive proper consideration.
We knew from the start that this case would be an uphill battle, but we also knew the stakes were too high not to try. In appealing to the Supreme Court, ICAN is not only seeking to protect our client and his family from financial ruin, but we are also working to protect countless other unsuspecting traders and advocating for the end to this Depression-era law.
Read our Press Release
New Details: FINRA's Sudden Action After 15 Months of Delay
The second case I want to update you on involves FINRA's 15-month delay in processing routine corporate actions for the Entrex Carbon Market. As mentioned in our last email, when we were pleased the SEC, just three days after our filing, ordered FINRA to prepare a record of the underlying events in two weeks. Shortly afterwards, FINRA approved all of Entrex's corporate actions. It was a great victory for our clients. But there’s more to do. ICAN is continuing to pursue the case in order to press for structural changes that will hold FINRA accountable and help others avoid being similarly victimized by the quasi-governmental agency’s overreach.
FINRA, a self-regulatory organization overseen by the SEC, is tasked with regulating broker-dealers and related entities. It gained expanded authority in 2010 when the SEC approved Rule 6490, allowing it to review and potentially block corporate announcements, such as name changes and stock splits, by OTC companies. FINRA now believes it has the authority to request extensive documentation and decline processing if deemed "necessary to protect investors."
The irony is striking: FINRA's tagline is "85 Years of Protecting Investors," yet the Entrex shareholders ICAN represents certainly did not feel protected during the 15 months FINRA kept the company’s application in limbo. Just two weeks after ICAN filed our application with the SEC challenging this delay, FINRA suddenly approved all of Entrex's corporate actions on April 21—the very same day they requested more time from the SEC to prepare an administrative record.
As I told Law360, "The fact that FINRA could suddenly process all corporate actions on the same day they requested more time demonstrates there was never any justification for the extended review period." (This case has received ongoing coverage from Law360, which recently published an article titled "FINRA Acts On Entrex Application After SEC Gets Complaint.")
Even more concerning is FINRA’s continuing failure to comply with the SEC's direction to file the administrative record, directly disregarding the Commission's instructions. FINRA is also attempting to claim that our broader application challenging FINRA’s inaction is now moot because FINRA has approved the specific corporate actions in question.
But this case isn't just about Entrex—it's about setting clear standards that prevent FINRA from subjecting other companies and their shareholders to similar arbitrary delays. That's why we, along with our fabulous pro bono attorney partner, Tiffany Rowe of Cadence Partners, are continuing to press for the structural reforms requested in our initial application, including mandatory processing timeframes and transparent deficiency notifications.
The Watchdog Role: More Critical Than Ever
These cases illustrate why ICAN's watchdog role remains critical. When regulatory agencies operate without proper accountability or transparency, everyday Americans bear the consequences. A grandfather trading for retirement can face financial ruin over an outdated law. Shareholders can see their investments affected when their company is forced to trade under an outdated name due to regulatory delays.
With your continued support, we will persist in these battles—whether they take months or years—because we understand that meaningful reform requires both vigilance and patience. The legal protections we establish today will protect market participants for generations to come.
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.
Comments