In 2013, for reasons that remain unclear, the Supreme Court of the United States changed its rules to forbid non-lawyers from arguing before the Court. The shift stripped away a right that had been in place for more than 200 years. The option to represent oneself in “any court” in the nation was established with the First Judiciary Act in 1789, and reaffirmed in a revamp of the laws in 1949. Hollywood dramas aside, it’s generally held that representing yourself in legal matters is not a good idea, but the possibility was always there. You are entitled to your day in court, and if you so choose you can argue pro se, as presenting your own case is formally known.
Not anymore, at least in the Supreme Court. A careful read of the revised rules leaves little doubt on the issue. To be admitted to the bar of the Supreme Court, an applicant must have been admitted to practice in the highest court of a “State, Commonwealth, Territory, or Possession” for at least three years. In addition, the applicant must appear to be “of good moral … character,” and must present statements attesting to that character by two sponsors who are already members of the Court’s bar. In other words, to join the club you have to be a member already.
The change mostly went unnoticed. Few recognized that the Court had denuded a long-standing and characteristically American privilege, one that appears not to have resulted in any significant difficulty. What coverage there was noted that the last non-lawyer to argue before the Court had been a peculiar man named Sam Sloan. On paper, Sloan looks entirely like the kind of person you’d want to keep out of a courtroom: college dropout; onetime organizer of orgies at Berkeley; controversial chess enthusiast accused of trafficking in child pornography; former New York City taxi driver; serial polygamist who traveled abroad to father numerous children by women in developing countries; and ex-con who has spent significant time in prison, both in the United States and in other countries.
Here’s the thing: Sam Sloan won his case, 9–0.
In contrast to his colorful biography, SEC v. Sloan (1978) is no one’s idea of a wild ride. The case hinges on the Securities and Exchange Commission’s authority to impose temporary suspensions on the trading activity of suspicious stocks. Behind the scenes, however, the story of SEC v. Sloan illustrates why the recent changes to the Court’s rules are deeply un-American. For deep down in the tangled muck of one of the more bizarre episodes in the history of jurisprudence, there’s a hard diamond of truth—to truly live up to this country’s ideals, “moral character” doesn’t help nearly so much as being a little mad.
Now before we get into the weeds on this—and to be sure, there will be weeds—a couple disclaimers are in order. First, we should dispense with thinking of this story—featuring a chronic embellisher at its center and a range of dubious figures both inside and outside government—as one that can be verified in every particular. It’s not. Second, we should abandon all hope that this Sam Sloan character is going to wind up looking heroic, or even likeable. He won’t. Nevertheless, the story of SEC v. Sloan sheds light on the ambiguities of our legal system and the rights that you may think you have. It is an absurd yarn with real-world implications. Some of it will be true, some of it will be false, and the rest will wander into an uncanny valley where the difference between truth and lies becomes foggy.
In 2019, I spent three days with Sloan in his hoarder’s cavern of an apartment in the Bronx. Stalagmites of books rose from the floor, from coffee tables and from desktops. These included volumes (The Turner Diaries, Women on Top, and Bambi) that he intended to reprint through Ishi Press, a digital and print-on-demand publishing company that he assumed control of in the 1980s, whose business model is based on an aggressive interpretation of copyright law. Sloan walked around with his belt buckle hanging loose and his shirt mostly untucked. He offered extensive commentary on his five wives (“Every night I fucked her. Almost every night I fucked her”), several of whom he might still be married to. Sloan is now in his seventies, and he’s of that sort—savants and pathological geniuses—who regard basic hygiene as the stuff of intellectual phonies. Fans of Dustin Hoffman will recognize Sam Sloan immediately as a perfect splice of Rain Man and Ratzo Rizzo.
Before we got down into the grit of his Supreme Court odyssey, Sloan talked me through the lives he’d lived before and after those accidentally historic years. His erstwhile career as a chess enthusiast had begun in Richmond, when he was seven years old, at the Virginia Home for the Incurables (it was where the local chess club met). Years later, he managed to touch greatness when he attended a series of lectures by a young Bobby Fischer at the famed Marshall Chess Club in Manhattan. After the lectures, Fischer and Sloan wandered the city at night like twin Holden Caulfields, playing billiards at the pool hall where The Hustler had been filmed a couple of years earlier.
Sloan graduated high school in 1962 with low grades and high test scores. U.C. Berkeley took a chance on the test scores, but Sloan’s college years were mostly about sex. He wound up in the orbit of Jefferson Poland,[1] a leader of a fringe student movement known as Sexual Freedom League. Saturday night sex parties drew 40 to 50 couples, 100 on New Year’s Eve.
The post–Supreme Court years were equally flamboyant. There was a period in Japan, during which he landed a one-line speaking part in a film called Mahjong Horoki (1984).[2] There were four years in the United Arab Emirates, writing a chess column and running a computer store. There was the time he kidnapped one of his daughters to save her from a group associated with Jerry Falwell’s Liberty University. (He did 18 months in a Virginia prison for that one.) There were the years he drove a cab owned by Donald Trump’s goofy pit bull of an attorney, Michael Cohen. (That wound up in court, too: Sloan represented himself in the New York State Supreme Court, and he won there, as well.) There was the time he was accused—shortly after he was elected to the Board of the United States Chess Federation—of having trafficked in child pornography. The New York Times reported on evidence that his accusers had lied.
And, oh yeah, he also ran for political office a number of times. He won 8.8 percent of the vote in a 2014 primary challenge of Congressman Jose Serrano of the 15th District of New York. In 2016, he tried another district but got only .5 percent. Also in 2016, Sam Sloan mounted a robust campaign for president of the United States. Alas, he didn’t win.
It was Sloan’s mother who set him on a collision course with the SEC’s Department of Enforcement. She had permitted her son, at age 13, to purchase two securities, through a neighbor who traded stocks. Taking a bath on Burma Mines Company Ltd. and American Motors Corporation did not dissuade the boy from a belief that he had a preternatural talent for trading. After he was (inevitably) expelled from Berkeley, Sloan flew east for a chess tournament. New York offered the chance to weave together twin passions—finance had long been a safe landing pad for chess geeks who actually wanted to make a living.
He told me a couple of different stories about how he began working as a broker-dealer. In one, chess contacts served as an entrée to the firm J.S. Love and Co. In another, he was hired in the Over the Counter Department of Hayden, Stone, and Co., but only because one of the brokerage’s executives was also named Sam Sloan. (The interviewer assumed Sloan was a relative.) In this version of the story, Hayden, Stone got itself into hot water, the company was acquired, and Sloan was fired. Soon after, he and an acquaintance decided to open a brokerage of their own. They may or may not have had $10,000 in capital at the time. That’s when the trouble started.
Sloan and his partner registered as a brokerage on May 10, 1970. By January 1971, the partner was gone. What seems to have started the ball rolling was the SEC’s decision to give a little extra scrutiny to Sloan’s application to become sole owner of Sloan and Co.
Now I completely believe the SEC’s claim that Sloan’s books were wholly out of order. There was no bank record or trial balance that could be used to verify that Sloan’s total assets exceeded the $5,000 net capital requirement for broker-dealers at the time. I also believe the SEC investigator who reported that Sloan had admitted that he had “no books, per se.” And I even believe the claim that half of a ham and cheese sandwich was found in Sloan’s desk drawer when investigators visited his office to inspect his books.
But none of this explains the intense energy that the SEC brought to bear in what became a years-long campaign to revoke the trading license of just one of many small-time brokers in New York at the time, a young man whose assets, in all likelihood barely ever slinked up into the six figures. Sloan told me that he had long wondered whether the SEC had suspected he was involved in organized crime.[3] Either that, he said, or they didn’t believe someone like him could be a successful trader. This reminded me of something Sloan wrote later, in a petition for a rehearing at the Second U.S. Circuit Court of Appeals. “This court,” Sloan argued, “does not personally like Samuel H. Sloan and therefore does not want to hear and consider his appeals.”
To be clear, Sloan is not a likable person. He’s really not likable. The best way to say it is that Sloan has a Tourette’s-like tendency to say and do things that people of good conscience invariably find to be inappropriate. It seemed to me that he’d been singled out because he was peculiar.
Jerome Selvers, one of the SEC investigators, denies this. He acknowledged Sloan’s “offbeatness,” and noted that Sloan had not been shy about asserting that he was smarter than everyone else. But Selvers rejects the idea that the investigators ever took the case personally.
Before I met Sloan, I spoke with attorney Thomas Sporkin, who spent 20 years in the SEC’s Division of Enforcement. Sporkin helped launch the Office of the Whistleblower, which today provides cash awards to those who expose securities violations. Now in private practice, Sporkin told me that SEC investigators may have allowed the case to “get personal.” He likened it to higher-profile SEC battles in which the plaintiffs seemed to get under the agency’s skin. Analyst Raymond Dirks won a landmark Supreme Court case. Billionaire Mark Cuban prevailed in another famous showdown.
I contacted Sporkin because his father, Stanley Sporkin—later the general counsel for the CIA—had served as director of the SEC’s Division of Enforcement at the time of the Sloan investigation. There was no love lost between Sloan and the elder Sporkin. Sloan had once accused Stanley Sporkin of engaging “in a criminal conspiracy to violate the Securities Exchange Act,” and he claimed that Sporkin had once authorized the use of a helicopter to ensure that papers in the Sloan investigation were filed on time. I described SEC v. Sloan to the younger Sporkin—the protracted battles over legal nuance, and Sloan’s uncovering of a fraud (more on this in a bit)—and despite Sloan’s animosity for his father, Thomas Sporkin admitted that the case sounded like the kind of thing that, these days, might entitle Sloan to a whistleblower award.
Sloan had been executing trades for barely a year—swaps that involved dozens of “penny stocks”[4]—when the SEC’s initial action against him resulted in a temporary injunction. The negotiated settlement granted Sloan a trial and permitted him to cover his “shorts”—to pay losses when he had bet against a stock and it went up.
But what soon became clear was that the SEC would not be satisfied with revoking Sloan’s license only temporarily. It was determined to secure a permanent injunction against him by showing that his net assets did not exceed the $5,000 net capital requirement. The whole argument, which played out over the next few years, wound up focusing on a single stock, Canadian Javelin, Ltd., which a U.S. government attorney had once called “the most mysterious company known to man.”
Canadian Javelin was the private sandbox of an eccentric American financier named John C. Doyle. Doyle lived in an opulent Ottawa penthouse filled with antique furniture. He owned a gilded harp, and at least three organs. He was known to fly cuts of salmon to England to be properly smoked. He was called an “evil genius” and a “seductive slug.” In the mid-1950s, Doyle schemed to strip iron ore out of Labrador, in Canada’s far northeast. Even then, Canadian Javelin was having a hard time remaining listed on Canadian exchanges due to improprieties, and in 1959 the SEC took an interest in the company, as well, because there were predictable wiggles in the price, and shares were trading heavily in the U.S.[5] In the late 1960s, Doyle initiated another dubious plan, to open a paper mill in Labrador. For a time, he controlled an area of forested land nearly the size of West Virginia. A court-appointed referee described a previous scheme of Doyle’s as “at best, devious and doubtful, and at worst, corrupt and venal.”
Sloan told me he’d learned of Canadian Javelin from another small broker-dealer, who was aware that the SEC was already suspending trading of the stock under the obscure rule that sits at the black, bleeding heart of this story. The Securities Exchange Act of 1934 permitted the SEC, without explanation but in the interest of the public good, to suspend the trading of any security “for a period not exceeding ten days.” Canadian Javelin had already been suspended—effectively a black mark against a company even after the suspension is lifted—and this spelled opportunity for Sloan, who could short the stock in the U.S., sell shares in Canada, and turn a profit of $2 per share, no matter what happened.
There was just one problem. Nothing prevented the SEC from issuing one 10-day suspension and then another, and another. Canadian Javelin was suspended in this way from March to August in 1972, a period of nearly six months. It wasn’t this suspension, however, that burned Sloan. It was the next one, initiated by the SEC on November 29, 1973. It came when Sloan was short on Canadian Javelin to the tune of 33,400 shares.
Sloan did not take his injunction lying down. After his license was pulled temporarily, he learned of another Canadian Javelin scheme. Now a fugitive from justice, Doyle was attempting to inflate his stock price with a claim that he had invested $14 million to initiate a drilling operation of 2.2 billion tons of copper-bearing materials in Panama. There were rumors that Canadian Javelin would skyrocket to as much as $500 per share.
Sloan flew to Panama, posing as an investor. His plan was to expose the scheme, deflate the stock price, and get out of his short position. Doyle suspected nothing when he met Sloan in the lobby of his hotel. He arranged a flight for Sloan to visit the site of the mining operation. Sloan laid out the scheme to the SEC in a pair of letters from the summer of 1973. The geologists he’d met in Panama, he claimed, had no idea where the figure of 2.2 billion tons of copper had come from.
But it was too late. By the time the SEC halted trading of Canadian Javelin again—using the rationale from Sloan’s letters—the stock had already doubled in price. Sloan was caught in a lost position. This, in turn, spelled opportunity for the SEC. Investigators counted Sloan’s underwater positions as negative assets, putting him well below the $5,000 requirement.
It was all very convenient. It looked like the SEC had used Sloan’s work to both halt Doyle’s latest scheme and to put the final nail in the coffin of Sloan and Co. At this point, Canadian Javelin had been suspended—in 10-day increments—for more than a year.[6]
Sometime earlier, on May 21, 1973, Chief Justice Warren Burger and Justices Harry Blackmun, William Rehnquist, and Lewis Powell of the Supreme Court were served with a complaint via certified mail. A lawsuit contended that the justices had conspired in various “criminal activities and illegal operations” to throw the 1972 presidential election to Richard Nixon. The suit sought to remove Nixon and Vice President Spiro Agnew from office and to annul the appointments of four Supreme Court justices.
The case was cited as Sloan v. Nixon, and the plaintiff was Sam Sloan.
What happened was that the SEC had compelled Sloan to retain a lawyer for their ongoing battle. Soon enough, however, Sloan couldn’t afford the fees for each and every court appearance. He resolved to represent himself. He lied about having attended law school, enrolled at the Practicing Law Institute, and learned how to file and argue lawsuits. Sloan v. Nixon was filed in a fit of anger shortly after the Watergate break-in of June 17, 1972.
“The complaint is utterly without legal foundation, and while over a lifetime I have seen many misguided lawsuits, this must be the nadir,” wrote Judge Arnold Bauman, the Nixon appointee who dismissed Sloan v. Nixon. Bauman struck a different note in conclusion, however: “Although such actions represent an uneconomic waste of judicial time, it is important for our country that every citizen know that a day in court is his even where the highest officers of the nation are the subjects of his complaint.”
Judge Robert Ward, who presided over the first formal trial in SEC v. Sloan,[7] in December 1973, was similarly unimpressed with Sloan’s arguments. But he too recognized Sloan’s right to represent himself, even if doing so created difficulties. Sloan was not an officer of the court, and therefore he could not be disciplined for wasting the court’s time. “This is one of the problems that comes when we have a man who is pro se,” Ward said during the trial. “I have to and do give him every latitude.” Sloan later claimed that Ward had “paced the floor behind the bench” during the trial. He “bared his teeth,” and stomped around the courtroom to shout at “the pro se defendant.” At the time of judgment, Ward told Sloan he “had had more than his day in court.”
In April 1976, Sloan appealed to the Second Circuit—for the second time. A three-judge panel showed as little patience with Sloan as Judge Bauman had. Sloan’s suit was the “latest maneuver in [his] long struggle to avoid compliance with the Securities Exchange Act.”
By this point, SEC v. Sloan was really two cases merged into one. In the first, Sloan argued that his Fifth and Sixth Amendment rights had been violated. The appeals court struck that down, seeing no serious merit in the claim. The second focused on the issuance of 10-day suspensions, specifically the yearlong suspension of Canadian Javelin. Here, something fishy was afoot.
A study published in 1969 had noticed a trend. For a decade after the passage of the Securities and Exchange Act in 1934, there were no suspensions at all. From 1944 to 1960, suspensions averaged one per year. In 1961, there were four suspensions. In 1962, there were six. In 1965, 11. Fourteen in 1966. And then 29 in 1967, and 41 in 1968.[8] It looked as though someone had cooked up a cracked interpretation of the statute, and the SEC had been running with it ever since.
Harvey Pitt, who later served a harried term as chairman of the SEC during the Enron scandal, squared off against Sloan as the commission’s general counsel in SEC v. Sloan. Pitt told me that he’d advised the SEC that its interpretation of the 10-day statute—adding “at a time” to the end of “for a period not exceeding ten days”—was tenuous at best. But nobody I spoke with could tell me anything at all about why the SEC had begun using successive 10-day suspensions to skirt the law’s plain language.
The Second Circuit couldn’t quite mask a tone of astonishment in acknowledging that Sloan had stumbled onto an argument with merit. “Apparently, this question has never been judicially considered,” the panel wrote, “and would seem not to be frivolous.” The judges agreed that the SEC’s policy had been “erroneously adopted” and “improperly pursued.” Their conclusion was emphatic: “The SEC is, therefore, directed to discontinue forthwith its adoption and use of successive ten-day suspension orders.”
For the first time, Sloan had actually won something. But the decision satisfied no one. The SEC wanted to go on suspending stocks. Sloan wanted to get his license back. Both appealed to the Supreme Court. Sloan’s appeal was not granted cert—i.e., a decision to hear his complaint before the high court—but the SEC’s was, in May 1977, in a vote of 6–3. Oral arguments were scheduled for March 1978.
Sloan told me that as many as 10 lawyers offered to argue the case on his behalf. He refused. How could any attorney, in the short time that was available, become familiar enough with the case? The stage was set for Sloan to move that a non-lawyer should be permitted to argue before the Court—with the added twist that just a few years earlier Sloan had filed suit to have four of the justices who would hear his case removed from the bench altogether.
To be fair, Sloan’s 175-page brief in SEC v. Sloan is a singularly absurd and complicated document.[9] It attempts to tell an untellable story: all the actions that resulted from the SEC’s initial investigation of Sloan, and the various litigations that continued for several years, with far too many obfuscations and legal shenanigans—on both sides of the case—than can possibly be documented here.
It may or may not bear on one’s impression of Sloan’s juridical adventure that all of this was happening—the secret trip to Panama, the rat king of lawsuits, and now the writing of an impossible-to-read 175-page brief—while he was also beginning to indulge in an impulse to travel abroad to meet women and impregnate them. Sloan’s first such trip, to meet a “beautiful girl” in Bogota in 1972, didn’t go anywhere, romantically speaking, but the very next month he embarked on a round-the-world journey, with a first stop in Reykjavik, Iceland, where he both convinced several Icelandic women to return to New York with him and reunited with his old friend Bobby Fischer, who at that moment was in the middle of the most famous chess match in history: the world championship contest against Soviet grandmaster Boris Spassky.[10]
Another trip came in 1976, when Sloan flew to the Republic of Georgia and then took a train to the holy city of Mashad in Iran, where he converted to Islam and took the name Muhammad Ismail Sloan. He almost got married in Armenia, and from there went on to Afghanistan and the Chatral region of Pakistan, where he married or almost married several women of the Kalash ethnic minority. In 1977, he bought a car in Munich and drove through Bulgaria and Turkey, and the following year he returned to Afghanistan to recover money he’d left in a bank on an earlier trip. This time he was arrested as a spy. He spent three months in jail, escaping once only to be captured in Jalalabad, and then escaping again to wander through 40 miles of desert, learning Pashto on the way. Eventually, he traveled to the U.S. Embassy in Pakistan with a Kalash woman—she became the first of his multiple wives.[11]
Several months after our initial interviews, Sloan and I met again at the National Archives in New York, to look through some materials related to his case. We stumbled across transcripts explaining what had happened with the Icelandic women, after Sloan enlisted them to help keep the books of Sloan and Co. The documents revealed that at least some of the Icelandic women had refused to lie under oath for Sloan about the record-keeping of Sloan and Co.
Sloan’s legal antics—be it manipulating witnesses or having Supreme Court justices served with writs—go a long way toward understanding what is the only official, firsthand record of SEC v. Sloan. Every year, the chambers of Justice William Brennan produced a lengthy narrative commentary on the term’s notable cases. SEC v. Sloan was included with accounts from the 1977 term, but not because of its merits. Rather, the record was produced in order “to document the extraordinary hostility of … Chief Justice [Warren Burger] to lay litigants in this Court.”
Although Brennan was on the court at the time of Sloan v. Nixon,[12] the narrative from his chambers does not take note of the fact that, just five years earlier, Sloan had sought to have Burger and three other justices impeached. The narrative limits itself to Burger’s attempt to strike Sloan’s brief because it was too long. That’s not the whole story, though. Additional documents[13] reveal that on March 16, 1978—a week and a half prior to the oral arguments—the court’s private conference considered a lengthy motion that Burger submitted in relation to SEC v. Sloan.
In short, Burger attempted to deny Sloan his day in court. His argument noted that Sloan’s motion to present his own case was based on the “all courts” language of the First Judiciary Act, which states “[t]hat in all courts of the United States, the parties may plead and manage their own causes personally.” Burger acknowledged that the 1949 revamp also said “all courts,” but he claimed that the latter’s use of “plead and conduct,” and the former’s use of “plead and manage,” suggested that what was meant was trial court proceedings. The Supreme Court was not a trial court.
His “extraordinary hostility” came in his conclusion:
I recognize differing views on this, but I am strongly opposed to allowing any non-lawyer to argue in this Court. (I also move to strike Sloan’s brief.)
The other justices didn’t buy it. They were unwilling to unwind two centuries of precedent just because Sloan was a jerk. Sloan’s brief was not stricken, and “the Chief’s suggestion was voted down at Conference.” Burger was left furious, one of the clerks told me. He believed the court was going to be disgraced, and he didn’t want to give Sloan any sort of victory. “I think it just got personal,” the clerk said.
Sloan received a certified letter on March 1, 1978, detailing the protocol for arguing before the court. He flew to Washington, and his mother drove him and one of his wives from the airport on the morning of March 27, though she took a wrong turn and they were several hours late in arriving. Before the argument began, Sloan mistakenly took the elevator reserved for the justices. No one noticed.
SEC v. Sloan was the last case of the day. In the moments before the arguments began, Solicitor General Wade McCree appeared to briefly greet Sloan and to exchange a few words with Harvey Pitt, who had argued an unrelated case before the court three months earlier. Sloan overheard their exchange.
“You’re gonna have a pretty easy time with this one,” McCree said.
“I’m not so sure,” Pitt said.
Chief Justice Burger, blessed with a deep, commanding voice, began the proceedings. “We’ll hear arguments next in Securities and Exchange Commission against … Sloan.” He paused theatrically, as though he needed to glance at his notes to verify the name of a respondent he knew very well.
Harvey Pitt stepped up to the podium and launched into a cogent defense of a position even he thought was untenable. He claimed that the SEC had issued suspensions in a responsible manner, with each of the five commissioners weighing in on a “separate and fresh review” of facts for each 10-day suspension.
Justice William Rehnquist interrupted with the obvious question: Should there be any kind of limit on the SEC’s suspension power? Yes, Pitt said. The SEC’s authority to suspend the sale of stocks should be limited to when consecutive suspensions amounted to an abuse of discretion.
Then Justice Burger screwed up. “What about 36 consecutive suspensions of 10 days each?” he asked. “Where would that fall?”
This was, in fact, the exact number of suspensions listed in the SEC brief, which put Pitt in an awkward position.[14] He dodged and weaved, until Rehnquist came to the rescue. He changed the question from 36 suspensions to a hypothetical 20. This enabled Pitt to get back to an even keel, arguing that the Canadian Javelin case had been very complicated, involving fugitives from justice and manipulators in both foreign and domestic markets. It might well take an extended period of time to prepare materials for a judge, he said, to whom the SEC could appeal for a much longer suspension—as long as a year.
Justice Potter Stewart noted that Canadian Javelin had already been suspended for more than a year—10 days at a time. Pitt repeated that it was a complicated case.
“For how long?” Justice John Paul Stevens asked. “How long should be required to get enough evidence to make out a case?”
Pitt refused to specify—not even 50 days would be sufficient in all cases.
“I’m just wondering,” Stevens persisted, “if you have the 10-day power you claim, why would you ever run to court for” a yearlong suspension?
Pitt responded nonsensically and tacked toward his conclusion. He appealed to the justices to rule on the merits of the case. If they did not, Sloan would surely take them back to the Second Circuit. The matter was before the court now only because Sloan, this time, had not first gone to the district court, which had found all his previous claims to be frivolous.
“Well,” Stewart quipped, “I guess he took it as a lesson never to try that route again.”
Supreme Court arguments are hushed, sedate affairs. Emotions inserted into the proceedings tend to have an exaggerated effect. Tepid jokes become riotously funny. Mild slights become devastating insults. At Stewart’s quip, a throaty gurgle of laughter rose up from the audience seated behind the litigants. It was more than amusement at the break from formality. Stewart’s joke had a subtext. The suggestion was that an issue with merit had managed to come before the court only because Sloan had refused to play by the rules. Perhaps a lawyer—one with “moral character”—would have been unwilling to execute an end-run around the judicial chain of command.
Pitt laughed along with the audience. “Indeed, Sloan has learned well,” he said, and quickly concluded his presentation.
The day was nearly finished when Sloan rose to the podium. What came next was, according to the Brennan narrative, the one thing that made SEC v. Sloan significant. Before Sloan had a chance to speak, Chief Justice Burger demanded to know whether Sloan had received the usual “notice to counsel” that was sent when lawyers were granted leave to appear before the court. The exchange that followed was “amazing” and left Brennan “incensed”:
SLOAN: I have not received anything.
BURGER: Nothing?
SLOAN: No.
BURGER: March 1 letter, you have not received?
SLOAN: No, I have not.
BURGER: Are you aware that the rules of the Court require that counsel ... must register with the Deputy Clerk in Room 22D at 9:00 AM or shortly after that on the day assigned for argument?
SLOAN: No, I am not aware of that rule.
BURGER: Then you better check your mail, because you are in violation of that rule. You did not appear here until 2:30 today, and the Court cannot organize its business if it doesn’t know that arguing counsel is going to be present. Now you may proceed.
SLOAN: Thank you very much, Your Honor. Gentlemen, Mr. Chief Justice, and may it please the Court.
Sloan made it only two or three minutes into his argument before Burger interrupted to adjourn to the following morning. Harvey Pitt told me that after the argument’s first day, Burger’s “enormous hostility” to Sloan made him believe that an unwinnable case just might be winnable, after all.
After adjournment, Justice Brennan cornered Clerk of the Court Mike Rodak. Earlier in the day, Rodak had slipped Burger proof that Sloan had received the March 1 letter. So Burger knew Sloan had lied. Now, cornered by Brennan, Rodak fessed up: Pitt, too, had checked in late. He’d arrived only 45 minutes before Sloan.
Brennan burst into his chambers, complaining to his clerks that Burger had treated Sloan “like a dog.” The chief had feared that Sloan would disgrace the court, but now he had disgraced it himself.
Brennan immediately dictated a note, and a terse exchange of letters on the afternoon of March 27, 1978, sent to the entire conference—all justices receiving a copy—may mark a low point in the history of intra-chamber correspondence at the Supreme Court. Brennan insisted that Pitt be compelled to acknowledge that he was tardy, as well. Burger claimed innocence and blamed Rodak for failing to inform him that both sides were late. He suggested a letter of reprimand to the SEC.[15]
When the proceedings resumed the following morning, Sloan had shifted into full Perry Mason mode. “I wish to bring to the attention of the Court a small factual matter which came to my attention yesterday,” he said. He reminded them that the day before, Chief Justice Burger had asked a question about 36 consecutive suspensions. Overnight, Sloan had noticed that the SEC’s filing had failed to include a single suspension dated December 25, 1976.
Burger now recognized his mistake. He tried to backtrack. “The question I put, Mr. Sloan, was purely hypothetical. It was deliberately made one less to make it a hypothetical.”
Sloan chuckled. That was the problem. Thirty-six was exactly what was in the SEC filing. If Burger had wanted to reduce the number by one, he would have said 35. The total number of suspensions, including the one dated Christmas Day, was 37. Burger had been caught lying.
Sloan next went into a complicated sequence to argue that both of the previously consolidated cases of SEC v. Sloan should now be before the court. He slyly suggested that his own appeal should have been granted cert, and should be considered now. Justice Thurgood Marshall saw right through it and chastised Sloan accordingly. (“Do you understand that the other case is not before us? Well, let me tell you it is not. Will that help you?”) Next, Sloan attacked the various reasons the SEC had relied on in issuing suspensions, until Rehnquist sensed a hole in his argument and prodded Sloan (“Do you concede or don’t you that there are circumstances under which they could issue more than one 10-day consecutive suspension?”) to acknowledge that the SEC might be right about the law after all. Sloan’s refusal (“No, I do not make that concession!”) was delivered with all the passion of a Hollywood courtroom drama.
Justice White interrupted to establish that Sloan’s position was about consecutive suspensions only. This exchange sank deep into the legal weeds. Sloan explained that Section 19 (a) of the Securities Exchange Act of 1934 included four provisions, of which, (1), (2), and (3) all required the SEC to provide notice of a suspension. 19 (a) (2) had become provision 12 (j) of the newer law, but the SEC had been relying on 12 (k), originally 19 (a) (4), to issue 10-day suspensions, even though they had had more elaborate resources available to them since 1934.
Four decades later, halfway-dressed, seated among his pylons of books and occasionally fielding calls from his wives asking for money, Sloan told me that at one moment during the oral argument, Justice Brennan reached across to tug the sleeve of Chief Justice Burger’s robe. Brennan nodded in Sloan’s direction, as though to say, “See, I told you so.” He had known all along that Sloan’s argument would prevail. Sloan did not recall precisely at what moment this occurred, but it was surely during this speech—when the Justices stopped holding Sloan to the merits of the case, stopped scolding him, stopped attempting to trick him into making concessions, and turned instead to simply ask him to clarify vagaries of the law’s history. Suddenly, everyone in the room realized that Sam Sloan—an embodiment of the absence of “moral character”—understood the law better than anyone present. The justices fumbled a bit with their laymen’s understanding of finance. For an extended period, Sloan seemed almost to forget himself. He accelerated to the climax of his presentation:
SLOAN: I would like to point out that in this particular case, the SEC suspended trading for three-hundred-and-seventy days, which is more than one year. Therefore, what they are saying is that they can suspend a stock for a longer period of time under 12 (k), without notice, than they can under 12 (j), with notice, and I am sure that this could not possibly be what Congress intended.
He paused, expecting to be interrupted. He wasn’t. The case had been reduced to its simplest denominator. The SEC had violated the law, not just in this single case, but hundreds of times over. Like it or not, Sam Sloan was right.
It took him a moment to compose himself and go on. He pointed out that the very first suspension order had gone into effect three days before it was signed by the commissioners. How could they possibly have approved of it? After some further back and forth, Sloan’s time expired. Pitt had three minutes remaining. Burger gave him 10.
Justice Stevens barely let him speak. He asked after the Christmas Day suspension order, which had gone unremarked upon since Sloan first mentioned it, half an hour earlier. Was it true, Stevens asked, that an order had been entered on that day? Pitt admitted that it had. This unleashed a frenzy of judicial sarcasm, various justices chiming in to remark on the great deliberation that the commissioners of the SEC had likely given the order when they showed up to work on a holiday. These wry remarks also had a subtext. The suggestion was that the SEC had deliberately omitted the date from their filing, so as to not call attention to the fact that suspension orders were communicated in a loose fashion, orally, without any paper trail. The scheme had come to light only because Sloan had noticed that on the first day of argument, Chief Justice Burger botched his attempt to pose a hypothetical question to Harvey Pitt. And now Pitt was forced to suffer through what even he recalled as a vicious round of questioning, until his time was up.
“Thank you, gentleman,” Burger said. “The case is submitted.”
The outcome was a foregone conclusion, but the drama wasn’t over. A former clerk told me that when the justices gathered in conference, Justice Brennan proclaimed that Sloan had performed splendidly. Burger scowled. The Brennan narrative concluded that “all but the Chief agreed [that Sloan’s argument] was among the best of the Term.”[16]
Burger was reluctant to join with the rest of his colleagues in officially siding with Sloan. Justice Rehnquist’s chambers penned a tepidly worded opinion, drafts of which passed from chamber to chamber, the various justices joining with what was clearly going to be a lopsided decision. All except the chief justice, that is. At last, on May 6, 1978, Burger sent a quick note to Rehnquist to say that his “reservations” had now been “resolved.”[17] It’s unclear whether any of the justices knew that when their unanimous decision was handed down on May 15, 1978, Sloan was in a Central Asian jail on suspicion of being a spy.
I obtained files on SEC v. Sloan from the archived papers of seven of the nine justices who heard the case. I received permission to submit questions to Justice John Paul Stevens a month before he died in July 2019. His papers will not be made available until fall 2020. The only remaining file I have yet to consult is that of the central player in the Sloan drama: Chief Justice Warren Burger. Burger’s papers are held at Swem Library at the College of William and Mary, where he served as chancellor until shortly before his death. Access to them is controlled by Leonora Burger, the widow of Burger’s son. Leonora Burger, I was told, does not wish to be disturbed and does not care about “the impact on historical inquiry.” She did not return requests for comment.
The impact of SEC v. Sloan appears to have been twofold. One result would seem to be a change to the Securities and Exchange Act, which has been amended a number of times since 1978. The portion of the law that now covers extensions of emergency suspension orders is Section 12 (g) (2) (k) (2) (C). The power to extend a 10-day suspension remains, but paragraph (C) ends unambiguously: “In no event shall an order of the Commission under this paragraph continue in effect for more than 30 days.”
A less direct consequence of SEC v. Sloan would appear to be the 2013 change to the rules of the court. I contacted the office of the clerk of the Supreme Court several times. Why did the Court decide to prohibit non-lawyers from arguing? Who proposes changes to the rules of the court? How are proposed changes approved? Do the justices argue or vote? The court’s Public Information Office promised a speedy reply. I never heard back.
“It’s funny,” one of the clerks from the 1977 term told me. “You don’t have to be a lawyer to be a Supreme Court judge. Why should you have to be a lawyer to argue before them?”
After Sloan won his case, he didn’t bother to try to get his trading license reinstated. There wasn’t any point, as the law had changed. Rather than $5,000, broker-dealers were required to demonstrate a minimum of $25,000 in assets.
He began to travel again, accumulating more wives and children. For a time, he worked on the fringes of the finance world, preparing for corporations financial reports required by the SEC, and he authored a number of books, including Khowar-English Dictionary (1981), Chinese Chess for Beginners (1989), and How to Take Over a Publicly Held Corporation (1992).
In the mid-1990s, not long after he was released from prison in Virginia, Sloan says he road-tripped to California, where a legal mix-up involving one of his wives resulted in his being incarcerated for an additional 42 days. Then came the years of driving a taxi, the years of fighting his way onto the Board of the U.S. Chess Federation, the years of publishing books that had already been published, and the years of running for office.
The last time I saw Sloan, at the National Archives, he announced that a day or two earlier, he had driven from New York to New Hampshire to pay the $1,000 required to enter the Democratic primary. He is once again running for president of the United States. He has imminent plans to reprint Catch-22 and Chess: A History. Finally, he received word that the highest court in South Carolina had refused to hear the case of a long-running feud in Sloan’s immediate family. Sloan had asserted that his brother was not his brother and that his mother had been kidnapped and held against her will for 13 years.
His last recourse is the Supreme Court. He intends to appeal.
[1] Poland and Sloan co-wrote a book about the Berkeley chapter of the Sexual Freedom League, Sex Marchers (1968). Poland later changed his name to “Jefferson Clitlick Poland,” and he pleaded guilty in 1983 to molesting a young girl. ↑
[2] Sloan’s line—“Hey, play by the rules, will ya?”—is a fair summary of the Supreme Court’s decision in SEC v. Sloan.↑
[3] As it happens, Sheldon Kanoff, one of the lead investigators of Sloan, years later pleaded guilty to participating in a trading scheme intended to funnel money to “unnamed organized crime figures.”↑
[4] Including, Sloan claims, a number of transactions with Bernie Madoff.↑
[5] Doyle wiggled his way out of trouble, too. He was first accused in 1960 of spiriting $4.8 million in Canadian Javelin stock from Canada to Liechtenstein, but the case was thrown out of court. Later, when he was questioned in a fraud investigation, he charmed two FBI agents into buying Canadian Javelin stock. In 1963, he pleaded guilty to another charge but balked at three months of jail time. He escaped to Canada—securities crimes were nonextraditable—and later to Panama.↑
[6] There were actually two suspensions of Canadian Javelin lasting more than a year. The first began on November 29, 1973, and remained in place until January 27, 1975, almost 13 months. Another suspension began on April 29, 1975, and lasted until May 2, 1976, 370 days, and it is this suspension that was discussed at length in the oral arguments of SEC v. Sloan.↑
[7] The initial suit was Sloan v. SEC. It became SEC v. Sloan when the Supreme Court agreed to hear the SEC’s appeal.↑
[8] A bench memo prepared for Justice Harry Blackmun found that between 1964 and 1976, the SEC had issued 10-day suspensions no fewer than 235 times.↑
[9] In the margin of a bench memo prepared for Justice Lewis Powell, which suggested that Sloan’s brief was not likely to be “very helpful,” Powell scribbled two words: Burn it.↑
[10] Sloan claims to have spent quality time with Fischer just before Fischer turned the match around, winning what amounted to a propaganda skirmish of the Cold War.↑
[11] It was at the U.S. Embassy in Pakistan that Sloan learned he had won his Supreme Court case. The decision had been announced while he was imprisoned.↑
[12] The justices discussed Sloan v. Nixon in their conference on May 25, 1973.↑
[13] Only Justice Thurgood Marshall preserved Burger’s motion. The document became publicly available through the Library of Congress when Marshall died in 1993.↑
[14] In the Supreme Court, where the emphasis is less on guilt and innocence in the case at hand and more on future disputes and legislation, it’s held to be desirable for hypothetical questions to present facts that vary significantly from a particular case.↑
[15] No such letter was sent.↑
[16] The Brennan narrative is a lingering mystery. The narratives were written by clerks, but all of Brennan’s clerks from the 1977 term deny having produced the account of SEC v. Sloan. Its authorship remains unknown.↑
[17] A clerk told me that Rehnquist was known to “salt” opinions with commentary on other opinions that the court had recently decided. It’s likely that Burger withheld his vote until Rehnquist salted the SEC v. Sloan decision with commentary on a more controversial decision, Adamo Wrecking v. United States, from earlier in the term. This, in turn, resulted in a concurring opinion from Justice Brennan that offered a blistering attack on the SEC and his fellow justices.↑