The Securities and Exchange Commission is an enormously powerful regulator.  The agency’s power stems, in large part, from its traditional response to a problem endemic in the securities laws.  The problem is that broad and vague statutory prohibitions, backed up by onerous liability, risk chilling market behavior in profoundly undesirable ways.  The SEC’s traditional response to this problem has not been to more clearly delineate what the law affirmatively prohibits, or to reduce liability, but rather to bless certain practices that it deems lawful using a variety of regulatory techniques that tend to elide traditional APA-based accountability mechanisms—e.g., safe harbors, no-action letters, guidance, exemptive relief, the strategic exercise of enforcement discretion.  These techniques allow the SEC to effectively micromanage the capital markets in a manner that (to put it mildly) sits in tension with the Brandeisian vision of the SEC as a hands-off regulator focused primarily on disclosure and fraud prevention.  And for most of its existence, the SEC exercised its vast power with very little legal pushback from market participants.  That has changed—dramatically—in recent years.  Empirical research shows litigation against the SEC jumping significantly in the 2010s and then skyrocketing in the 2020s.  In Suing the SEC, forthcoming in the Texas Law Review, I explore why.

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