The American Civil Rights Union filed a brief on Wednesday supporting a complaint that the National Association of Securities Dealers should be held accountable for misleading members as to a proxy vote over a change in bylaws.

“NASD’s claim of immunity highlights the threat posed by Self Regulating Organizations (SROs) operating outside laws designed to protect investors,” said ACRU General Counsel Peter Ferrara, who wrote the brief.

The brief states:

“The Constitution says that the legislative power is delegated to Congress, which covers regulatory rules as compelling as any statute. While private self-regulatory organizations are desirable, they must remain accountable and subject to the rule of law, especially since they exercise regulatory power outside of democratic accountability and control. Excessively broad immunity from suit denies such accountability and control under law.”

The ACRU’s brief supports a plaintiff request for the Supreme Court to accept the case on a writ of certiorari, noting that several appeals courts have differed on the merits of the case, Standard Investment Chartered, Inc. v. National Association of Securities Dealers, et al.

READ THE AMICUS BRIEF HERE. (PDF)