A brokerage firm petitioning the Supreme Court to review the power of the Securities and Exchange Commission (SEC) to enforce the Bank Secrecy Act (BSA) has received notable support from two former officials of the primary agency tasked with overseeing the anti-money laundering law.

Alpine Securities Corp. has challenged charges brought against it by the SEC in 2017 regarding violations of reporting requirements for filing suspicious activity reports (SARs) as required by the BSA. The firm is arguing the SEC is overstepping its bounds through its independent interpretation and enforcement of the law, which Congress entrusted to the Treasury Department.

The Treasury, in turn, has relied upon its Financial Crimes Enforcement Network (FinCEN) to primarily oversee and enforce the statute.

As the case has played out, a second-circuit appeals court upheld the SEC’s authority to enforce the BSA under its books-and-records powers. Alpine Securities filed a petition with the Supreme Court in July.

On Aug. 20, the firm’s challenge received key backing from former FinCEN Director James Freis Jr. (2007-12) and Deputy Director Charles Steele (2009-11).

“Supervisory agencies should not be able to unilaterally take BSA enforcement authority for themselves,” the two former officials wrote. “If the United States is going to replace its carefully crafted statutory AML regime—which purposely gives enforcement authority to the Treasury Department and its bureau FinCEN—with a diffused, multipronged approach, limited only by the number of federal, state, local and tribal regulators, and with myriad standards, requirements, penalties, and levels of judicial oversight, then it should be for Congress to do so.”

Any drastic change to the oversight structure of the BSA could ripple across the U.S. regulatory landscape. FinCEN often works with the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration, and the Treasury’s Office of the Comptroller of the Currency regarding guidance related to the law.

Multiple regulators have handed down enforcements for violations of the BSA, with recent cases including a $12.5 million FDIC fine against Apple Bank in December and a $1.5 million SEC penalty against GWFS Equities in May. Earlier this month, FinCEN coordinated with the Commodity Futures Trading Commission in a $100 million enforcement action against cryptocurrency platform BitMEX for BSA violations.

If the Supreme Court is to take up the Alpine Securities case, it could provide crucial clarity regarding the BSA, Freis and Steele wrote. The two state their concern the SEC’s enforcement of the law could lead to SEC-regulated firms taking a “better-safe-than-sorry approach” to SARs reporting, “even when they do not believe the conduct meets the threshold set forth in FinCEN’s regulations and guidance for suspicious activity.” The duo also stressed the importance of consistent enforcement of the BSA on a global AML scale.

“If the Court turns this case down, it may never again have the chance to address this important and recurring issue,” Freis and Steele concluded.

Also supporting the petition is libertarian think tank the CATO Institute, which argued the SEC is “flexing its ever-expanding prosecutorial muscle to enforce what are, in substance, the rules of another agency.”