SEC v Rose

Fact or Fiction?

​

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 in a matter of weeks. 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.

​

Meet Tom Rose 

​

Tom Rose spent fifty years in professional services—building high-tech companies, developing financial education programs for corporations and their employees, forging 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. The majority of them said so in sworn statements submitted to the very agency now trying to take nearly everything he earned. Today, Tom is retired in Plano, Texas, where he and his wife of more than 35 years are surrounded by five children and eight grandchildren—trying to enjoy the life he spent decades building, while fighting to keep the SEC from taking it.

​

He Is Not Alone

 

Tom Rose's story is not unique. It is, in fact, strikingly familiar.

​

In SEC v. Barry, ICAN represents three salespeople—Brenda Barry, Eric Cannon, and Caleb Moody—whose lives were upended after they sold products their employer had been advised were not securities. No investors were harmed. No fraud was alleged. Yet the SEC has spent nearly a decade pursuing them individually, seeking judgments of hundreds of thousands of dollars against people who had no reason to believe they were doing anything wrong. As ICAN has noted in that case, expecting a salesperson to evaluate a complex legal question differently than their employer's own counsel is downright unreasonable—and the SEC knows it.

​

Tom Rose's situation is cut from the same cloth. He was a sales professional licensed to sell insurance products with a legal opinion that the products he was selling were not securities. He did not set out to harm anyone—and the administrative law judge who heard his case agreed, finding that Mr. Rose had not acted with harmful intent, a finding that drove his civil penalty to the lowest possible tier and nearly the minimum dollar amount allowed within it.

​

This is the pattern ICAN was built to fight: an agency with unlimited resources pursuing individuals for technical violations, without fraud, without victims, until they run out of money to resist. This is the agency’s strategy to expand its power, and ICAN is pushing back. 

​

A Coerced Settlement and a Decade of Consequences

​

Facing an in-house SEC tribunal and unable to afford years of litigation against one of the most powerful regulatory agencies in the country, Mr. Rose did what most people in his position do: he partially settled, only contesting the amount he might have to pay. He did not admit wrongdoing. He accepted liability on a no-admit, no-deny basis in 2017.

​

That is not unusual—and it is not accidental. As Supreme Court Justice Neil Gorsuch has observed, and as ICAN's own brief in this case notes, the SEC deliberately used its in-house tribunal as leverage: more than ninety percent of defendants settled rather than endure the process. The SEC's own Director of Enforcement publicly acknowledged that the agency routinely threatened respondents with administrative proceedings until they settled. Justice Gorsuch later characterized this as "regulatory extortion." The proceeding itself was the punishment.

​

An administrative law judge ultimately ordered Mr. Rose to pay $297,360 in disgorgement—years of professional earnings—plus a $3,750 civil penalty. This amount has now ballooned to almost half a million dollars because of accruing interest levied by the agency.

​

What's Wrong With Mr. Rose's Case? Just About Everything.

​

Over nearly a decade, case after case brought before the U.S. Supreme Court confirmed that the constitutional foundations of proceedings like Mr. Rose's were never sound. The SEC applied only one ruling to his case—the one it was forced to address. The rest it has never acknowledged.

​

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 starting over with a new judge. The SEC corrected that one. As ICAN's 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. The SEC never corrected this aspect of Mr. Rose's proceeding.

​

3. He had a constitutional right to a jury trial—and never got one. Also in 2024, the Supreme Court held in SEC v. Jarkesy that the Seventh Amendment guarantees a jury trial in an Article III court when the government seeks civil penalties for certain types of violations—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. The Fifth Circuit's response in Jarkesy was to throw out the SEC's order entirely. The Supreme Court agreed. 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. As ICAN's brief documents: "No victim was identified. No loss was quantified. No explanation was offered." The SEC simply declared the pre-Liu order final and moved on—without a word. Tom Rose is not the only one. 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 seeking to enforce against Mr. Rose.

​

The SEC Went to Federal Court—and Left All of This Out

​

Everything described above—the unconstitutional administrative judges, the ignored right to a jury trial, the disgorgement problem, the pending Supreme Court case—the SEC failed to mention any of it in its application asking a federal court for an order enabling the seizure of Tom Rose's assets.

​

More than four years after declaring its order final—during which time accruing interest has transformed a contested $301,110 obligation into a $449,696.91 demand—the SEC arrived in federal court seeking to convert the administrative order into an enforceable federal judgment. What it did not tell the court is documented in ICAN's opposition brief.

​

Something else they left out? The SEC has already been intercepting Mr. Rose's Social Security benefits and federal tax refunds for over two years—twenty-eight separate intercepts totaling $14,477.70. It described Mr. Rose to the judge as someone who "willfully committed violations," while omitting that the very administrative judge whose order it seeks to enforce found that Mr. Rose did not act with intent. As ICAN's brief puts it: "The Commission's selective presentation of the record before this Court is of a piece with its selective presentation of the governing law."

​

Without ICAN, none of this would be before the court. Mr. Rose—like most people in his position—had no path back in. The administrative order was final. The window to appeal had closed. The SEC's version of the record would have been the only version the judge ever saw.

 

What We Are Asking the Court to Do

​

On March 17, 2026, ICAN—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."

 

Why This Case Matters

​

Tom Rose's story illustrates what ICAN knows too well: the SEC's enforcement machine does not stop when it should, does not apply the law as it evolves, and does not correct constitutional defects it is not forced to correct. Sales professionals, retirement planners, insurance agents—people just doing their jobs within the framework their employers established—can find themselves facing ruinous judgments, without a jury, without a victim, and without any realistic ability to fight back.

​

When that threat hangs over ordinary professionals, the consequences extend far beyond any single case. Financial professionals become reluctant to serve clients in innovative or emerging markets. Employers pull back from legitimate business practices rather than risk exposing their employees to decade-long enforcement nightmares. Talented, decent people leave the financial industry. The markets that most need access to experienced professionals are the ones that suffer most—and the people who lose out are ordinary investors trying to build a better financial future.

​

ICAN exists to change that. Not just for Tom Rose—but for the next person who finds themselves in his position, with no one to tell the court what the SEC left out.

​