SCOTUS Rules SEC's In-House Handling of Securities Fraud Cases Violates the Right to Trial by Jury
The Supreme Court today ruled that the Securities and Exchange Commission (SEC) may not impose civil penalties for fraud without filing suit in federal court. Because "the SEC's antifraud provisions replicate common law fraud," Chief Justice John Roberts writes for the majority in SEC v. Jarkesy, alleged violators are entitled to a jury trial under the Seventh Amendment. The decision rejects a perverse system in which the SEC, instead of seeking adjudication by an Article III court, can investigate, charge, prosecute, and penalize people for violating securities laws, with only limited judicia...