Supreme Court rules that the SEC's in-house rulings violate US constitution

The US Supreme Court ruled 6-3 that the Securities and Exchange Commission's (SEC) in-house proceedings violate the right to a jury trial, impacting the agency's ability to fight securities fraud. The decision could have broad implications for other regulatory bodies. The SEC, which regulates securities markets, was stripped of a significant tool in combating fraud. The court's decision was criticized by liberal justice Sonia Sotomayor as "plainly wrong." The SEC had been awarded over $5 billion in civil penalties in the 2023 fiscal year, but it remains unclear how much of this was obtained through in-house proceedings versus federal court lawsuits. The case involved a hedge fund manager, George Jarkesy, whose penalties were overturned by an appeals court, arguing that the SEC's administrative law judges were unconstitutional. This ruling is part of a trend where the Supreme Court has limited federal regulators' powers, aligning with conservative and business interests. The decision highlights the ongoing debate over the balance of power between regulatory agencies and the judiciary system.