Supreme Court limits use of SEC in-house tribunals
The Supreme Court ruled against SEC's use of internal tribunals in fraud cases, citing constitutional violations. Experts predict fewer enforcement actions due to required jury trials, impacting federal agencies' power and regulatory authority.
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The Supreme Court ruled 6-3 that the Securities and Exchange Commission (SEC) cannot rely on internal tribunals for enforcement actions in fraud cases, stating it violates the Constitution. The case, SEC v. Jarkesy, challenges the SEC's use of in-house legal proceedings, with the majority arguing for the right to a jury trial. This decision is seen as limiting the enforcement power of various federal agencies beyond the SEC. Dissenting justices warned of significant implications for federal agencies and existing laws. Experts suggest the ruling will impact agency enforcement actions, potentially leading to fewer cases due to the requirement for jury trials. While some view this as a necessary correction to agency power, others express concerns about the broader implications on regulatory authority. The ruling is part of a series of cases this term that could reshape federal regulatory power, including challenges to agency interpretations of laws and funding mechanisms.
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4 commentsThis should have been a straight forward case and it’s perplexing that it’s not being covered that way. If you get a traffic fine here in Maryland, you get to contest it in Maryland district court, in front of a judge that is nominated by the governor and confirmed by the state senate.
There is a precedent for executive branch quasi-judicial proceedings when it comes to government benefits, like the social security administration administrative judges deciding retiree checks. But this is completely different. It’s a punishment.
This doesn’t limit the SEC’s effectiveness at all. The SEC, of course, can bring lawsuits for civil damages in real courts—like every other executive branch agency both at the federal level and state level.
The fact that WaPo and other mainstream outlets are trying to spin this as a political win for the right should make everyone seriously question their motives and aims.
Although this ruling was on party lines, one thing I dont buy from the dissenting opinion this time that it’s not opposite. They just lean towards not being disruptive and never address the arguments the majority highlighted.
That’s far too skittish for me, I want a resolution on things that seem unconstitutional to me and they deprive us all from the opportunity of seeing any other perspective, just reinforcing the one we already have.
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