The hedge fund Elliott Management, whose owner has lavishly entertained Supreme Court (SC) Justice Samuel Alito, has argued that recent anti-fraud rules from the Securities and Exchange Commission (SEC) are unconstitutional — and could try to bring a case before Alito to strike them down, David Sirota and Julia Rock reported for Jacobin magazine.
Photo Insert: Paul Singer, who controls the hedge fund, Elliott Management, reportedly provided an undisclosed private jet flight to Alito, and has been a major donor to the Judicial Crisis Network (JCN), a dark money group that has funded campaigns to install conservative judges throughout the judiciary — including Alito.
Based on documents reviewed by Jacobin, the hedge fund controlled by Paul Singer has been arguing that the rules are unconstitutional, and could ultimately try to bring a case before Alito to strike down the new regulations if they are enacted.
The high court is currently considering a petition to hear a separate case involving the same firm.
ProPublica this week reported that Singer provided an undisclosed private jet flight to Alito, and has been a major donor to the Judicial Crisis Network (JCN), a dark money group that has funded campaigns to install conservative judges throughout the judiciary — including Alito.
The justice has declined to recuse himself in past cases involving the hedge fund. Elliott’s efforts to weaponize a recent Supreme Court case to block anti-fraud rules — and to potentially use the high court to kill them — spotlights how judges are in key positions to help billionaires who provide them with gifts and other largesse.
At issue is a proposal that would require investors to quickly disclose when they acquire a major stake in a company.
A faster disclosure timeline threatens the business model of firms like Elliott Management, which acquire stakes in companies, demand changes, and then profit when their position becomes public and the company’s stock price jumps.
“The 2008 crisis had many chapters, but a form of security-based swaps — credit default swaps — played a lead role throughout the story,” said SEC chair Gary Gensler when he announced the rules in December 2021, also pointing to the role of these swaps in the recent collapse of Archegos Capital Management.
“As part of the Dodd-Frank Act of 2010, Congress granted this agency broad authority with regard to security-based swaps, including three important authorities we’re acting upon here today.”