Assume that the Securities and Exchange Commission (SEC) has a rule under which it enforces statutory provisions prohibiting insider trading only when the insiders make monetary profits for themselves. Then the SEC makes a new rule, declaring that it has the statutory authority to bring enforcement actions against individuals even if they did not personally profit from the insider trading. The SEC simply announces the new rule without conducting a rulemaking proceeding. A stockbrokerage firm objects and says that the new rule was unlawfully developed without opportunity for public comment. The brokerage firm challenges the rule in an action that ultimately is reviewed by a federal appellate court. Using the information presented in the chapter, answer the following questions.

1. Is the SEC an executive agency or an independent regulatory agency? Does it matter to the out-come of this dispute? Explain.
2. Suppose that the SEC asserts that it has always had the statutory authority to pursue persons for insider trading regardless of whether they personally profited from the transaction. This is the only argument the SEC makes to justify changing its enforcement rules. Would a court be likely to find that the SEC’s action was arbitrary and capricious under the Administrative Procedure Act (APA)? Why or why not?
3. Would a court be likely to give Chevron deference to the SEC’s interpretation of the law on insider trading? Why or why not?
4. Now assume that a court finds that the new rule is merely “interpretive.” What effect would this determination have on whether the SEC had to follow the APA’s rulemaking procedures?

1- ***Debate This:
Because an administrative law judge (ALJ) acts as both judge and jury, there should always be at least three ALJs in each administrative hearing. 

***The 4 questions are not required to be responded. The most important part is to read the above statement in boldface, take a position whether you agree or not and have 3 arguments supporting your position. Please take a look on the attachment because the debate has to be based on chapter (CH 37)***

2- ***The attached picture is a debate from a classmate. Please read his debate and write a reply in a few statements to him.

Quote

The goal is to develop your critical thinking and analytical skills. I do not want you just to say because it is unfair or simply repeat the law. The answer cannot be because the statute says so. I want you to EVALUATE it. What are the public policy reasons behind your answer? Why this specific proposition is or is not a beneficial, efficient, or positive position to take? I want to see 3 arguments supporting your answer. You do not have to answer the questions. You MUST DEBATE the prompt.