Supreme Court Ruling in SEC v. Jarkesy: A Landmark Decision on Administrative Adjudication

On June 27, 2024, the Supreme Court’s decision in Securities and Exchange Commission v. Jarkesy declared the SEC’s administrative process for adjudicating fraud-based enforcement actions involving civil penalties unconstitutional. This landmark ruling has far-reaching implications for the SEC and other federal agencies, fundamentally challenging their administrative processes.

The case originated in 2011, with the SEC investigating investment manager George R. Jarkesy Jr. and his associated entities for fraud. After a series of legal battles, including a significant Fifth Circuit decision, the Supreme Court ultimately affirmed that the Seventh Amendment guarantees a jury trial for SEC civil penalty cases. This decision questions the validity of administrative adjudications in similar contexts across federal agencies, potentially reshaping enforcement strategies and regulatory practices.

To read more about the Supreme Court’s decision in Securities and Exchange Commission v. Jarkesy in depth, click here, click here.

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