Supreme Court Holds that SEC Regulation Immunized Investment Banks from Certain Antitrust Suits

In Credit Suisee Securities v. Billing, the United States Supreme Court held that antitrust laws do not apply to certain areas subject to SEC regulation. The plaintiffs in the case alleged that the syndication and marketing techniques of a dozen investment banks and underwriters, including alleged “tying” and “laddering,” violated antitrust laws and artificially influenced the market for dot-com boom IPOs.  In denying the plaintiffs’ claim, the Court showed a broad deference to the SEC, reasoning that the alleged conduct fit squarely within SEC regulation and that the SEC had authority to regulate the conduct.  On this basis, the Court held that the SEC regulations precluded the application of antitrust laws.

The Court emphasized the SEC’s superior ability to handle these types of complex line-drawing cases.  The Court also expressed a lack of faith in courts, stating that in this type of situation “antitrust courts are likely to make unusually serious mistakes.” 

This decision could be indicative of a broader surge in regulatory empowerment.  Surely other agencies that regulate banks, telecommunications, or other complex fields also have more expertise than courts.  This case raises several questions.  To what other regulatory agencies will this reasoning be applied?  Do regulatory agencies provide a safe harbor from certain civil court suits?  What other civil actions could arguably be precluded by federal regulation?