06.27.24

Supreme Court Rejects SEC’s Administrative Tribunals

by: Adam Liptak

The U.S. Supreme Court rejected one of the primary ways the U.S. Securities and Exchange Commission (SEC) enforces laws against securities fraud. The agency, like other regulators, brings some enforcement actions in internal tribunals rather than in federal courts. Chief Justice John G. Roberts Jr. wrote for a six-justice majority that the SEC policy violated the right to a jury trial. The case concerned George Jarkesy, a hedge fund manager accused of misleading investors. The SEC brought a civil enforcement proceeding against him before an administrative law judge employed by the agency, who ruled against Jarkesy. After an internal appeal, the agency eventually ordered him and his company to pay a civil penalty of $300,000 and to disgorge $685,000 in illicit gains. Jarkesy appealed the decision.

Read the full article on The New York Times