Narrative Opinion Summary
In 1998, the National Association of Securities Dealers (NASD) investigated Renaissance Financial Securities Corporation, where Scher served as general counsel. During an interview by NASD, Scher committed perjury and was later convicted in New York State court. Subsequently, Scher filed a lawsuit against NASD and its officials, alleging they failed to inform her that providing false testimony could lead to a perjury charge. The district court dismissed her claims, finding that NASD is absolutely immune from lawsuits due to its status as a self-regulatory organization (SRO) and not a state actor. The court concluded that actions taken by NASD during the investigation, including interviewing Scher and cooperating with state prosecutors, fell within its regulatory authority as conferred by the Securities and Exchange Commission (SEC). Therefore, the court did not address the merits of Scher's claims or the issue of NASD's state action. The judgment of the district court was affirmed.
Legal Issues Addressed
Absolute Immunity of Self-Regulatory Organizationssubscribe to see similar legal issues
Application: The court held that NASD, as a self-regulatory organization, is absolutely immune from lawsuits related to its regulatory functions, including investigations.
Reasoning: The district court dismissed her claims, finding that NASD is absolutely immune from lawsuits due to its status as a self-regulatory organization (SRO) and not a state actor.
Non-Consideration of Merits in Dismissalsubscribe to see similar legal issues
Application: The court did not address the merits of the plaintiff's claims due to the finding of absolute immunity, thus bypassing the need to evaluate the alleged failure to inform about perjury risks.
Reasoning: Therefore, the court did not address the merits of Scher's claims or the issue of NASD's state action.
Scope of Regulatory Authority under SECsubscribe to see similar legal issues
Application: NASD's actions during the investigation, including interviewing the plaintiff and cooperating with state prosecutors, were found to be within its regulatory authority as conferred by the SEC.
Reasoning: The court concluded that actions taken by NASD during the investigation, including interviewing Scher and cooperating with state prosecutors, fell within its regulatory authority as conferred by the Securities and Exchange Commission (SEC).