Supreme Court Considers SEC's Use of In-House Judges

A ruling in favor of George Jarkesy could impact other regulatory agencies and change how fraud cases are decided.

Conservative Supreme Court justices appear open to a challenge to how the Securities and Exchange Commission (SEC) fights fraud, suggesting that those accused of fraud by the SEC should have the right to have their cases decided by a jury in federal court, instead of by the SEC’s in-house administrative law judges.
The case in question, SEC v. Jarkesy, began 10 years ago when the SEC imposed fines on hedge fund founder George Jarkesy, who argued that the SEC didn’t have the power to adjudicate the dispute or impose fines against him.
A ruling in favor of Jarkesy could have far-reaching effects on other regulatory agencies, potentially inhibiting the ability of financial regulators to protect the public from corporate predators in the financial world.
Such a ruling would not go as far as former President Donald Trump and others on the far right want, as it would not eliminate the ability of federal agencies to bring other types of actions before administrative law judges or allow presidents to fire administrative law judges at will.
A decision in SEC v. Jarkesy is expected by early summer 2024.