Court Opinion

ID: 6915263
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:38:48.799405+00
Date Added: 2024-06-11T16:06:38.420491
License: Public Domain

LUMBARD, Circuit Judge
(dissenting).
The petition for rehearing filed by the Securities and Exchange Commission should be granted; we should hold Rule X-16B-3 to be valid.
The Commission’s brief reinforces my original view that not only is the Rule clearly valid but that in any event, the majority’s doubts as to its invalidity, which really amount to a holding of invalidity, should be based on more than a possibility of abuse as supposed and conjectured by judges.
*698As the Commission points out, the question we must ask is not whether isolated instances of abuse may result from this exemption, but whether the Commission was reasonable in deciding that “the possibility of the use of inside information * * * appeared slight by comparison with the interference by the statute with legitimate trading.” Memorandum of Securities and Exchange Commission, Amicus Curiae, page 5. As the Commission further points out, the majority’s approach which looks only to whether any abuse is possible, writes the Commission’s rule-making power out of the statute for almost any exemption will permit some possibility of abuse. To put the matter in another way, it may hardly be said as to any exemption that some abuse is not possible.
This balancing of the desirability of some exemption against the likelihood of its abuse is a function of the Commission and, unless clearly unreasonable and irrational, is not the function of judges. Therefore a decent respect for the powers and duties of an administrative agency should impel us to exercise our powers — here the power of a dictum — with some humility and self-restraint.
I would grant the rehearing and hold Rule X-16B-3 to be valid.