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May 20, 2024

Fact Sheet: Biased Courts Are Undermining the Rule of Law, Democracy, our Markets, Economy, and Capitalism Itself

WASHINGTON, D.C.— Benjamin Schiffrin, Director of Securities Policy, issued the following statement in connection with Better Markets’ new Fact Sheet, “Biased Courts Are Undermining the Rule of Law, Democracy, our Markets, Economy, and Capitalism Itself”:

“An independent judiciary is supposed to uphold the rule of law. However, federal judges in the Fifth Circuit Court of Appeals are consistently disregarding the law to strike down rules and regulations with which they disagree. These ideologically biased federal judges—twelve of the judges who sit on the Fifth Circuit were nominated by Republican presidents, and six of those 12 were nominated by President Trump—are ignoring facts, law, and policy to rule in favor of the financial industry and against financial regulatory agencies. And they are doing so aided and abetted by the practice of ‘forum shopping,’ where litigants can file suit in courts that they believe will rule in their favor. As a result, the financial industry now files almost all of its lawsuits against the financial regulatory agencies in the Fifth Circuit.

“Our fact sheet highlights some of the most egregious examples of litigants using forum shopping to bring recent challenges to financial regulations before the Fifth Circuit.  These examples include the Fifth Circuit invalidating the SEC’s stock buybacks rule for failing to attempt to quantify the rule’s effects despite the fact that the law imposes no requirement on agencies to conduct their own empirical or statistical studies; the Fifth Circuit invoking its rarely-used “en banc” procedure to vacate a decision favorable to the SEC, and the Fifth Circuit granting an emergency stay of the SEC’s climate disclosure rule even though the rule did not require compliance until 2026.  The Fifth Circuit is now considered so antagonistic to the SEC that the financial industry has formed a trade association in Texas for the express purpose of enabling it to forum shop and file suit against the SEC in that circuit.

“Nor is the Fifth Circuit’s hostility to government regulation limited to the SEC.  The Fifth Circuit recently ruled against the CFTC in a decision that one dissenting judge described as unprecedented.  And the Fifth Circuit overturned the decision of a district court judge in Texas that a case against the CFPB should be heard in Washington, D.C., rather than the Texas court in which it was filed, despite the view of another dissenting judge that the Fifth Circuit’s decision would hurt the federal judiciary’s ability to prevent forum shopping.  The fact that the Fifth Circuit would overrule a district court judge in its circuit who took the rare step of trying to combat a flagrant instance of forum shopping is an indication of how out of control the Fifth Circuit has become in its zeal to de facto rubber stamp industry complaints against financial regulatory agencies regardless of the law, facts, or policy.  It is clear that forum shopping in the Fifth Circuit has become an epidemic that is undermining the rule of law, democracy, our markets, economy and capitalism and must be addressed.” 

You can find the fact sheet here.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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