Securities and Exchange Commission v. Blinder, Robinson and Co.

Meyer Blinder was the founder, president, and principal shareholder of Blinder, Robinson and Company, Inc. (collectively, Blinder) (collectively, defendants), a securities broker-dealer. Congress created the Securities and Exchange Commission (SEC) (plaintiff) by enacting the Securities Exchange Act of 1934. The SEC, which was authorized to pursue civil-enforcement actions, was governed by five commissioners. SEC commissioners were appointed by the president and confirmed by the Senate for five-year terms. The president designated one commissioner to be the SEC’s chairman, who effectively controlled most of the SEC’s executive and administrative functions. It was commonly understood that the president could remove an SEC commissioner only for inefficiency, neglect of duty, or malfeasance in office. However, the president freely could remove the SEC’s chairman from that post. The SEC sued Blinder, which resulted in the district court issuing an injunction commanding Blinder to comply with the securities laws. The court of appeals affirmed the injunction. After losing a separate suit challenging the injunction, Blinder asked the district court that issued the injunction to vacate it on various grounds. The district court denied Blinder’s motion. Blinder then moved for reconsideration. Noting that the United States Constitution charged the president with taking “care the laws be faithfully executed,” Blinder argued that because the SEC allegedly was an independent agency that the president did not control, permitting the SEC to pursue civil-enforcement suits violated the Constitution’s separation-of-powers principle. The district court denied Blinder’s motion for reconsideration. Blinder appealed.