Securities and Exchange Commission v. Jarkesy
United States Supreme Court
144 S.Ct. 2117 (2024)
- Written by Angela Patrick, JD
Facts
Congress created the Securities and Exchange Commission (SEC) (plaintiff) to enforce federal securities laws. The SEC could bring enforcement actions in federal court, or, for some claims, it could choose to pursue the enforcement action in its in-house system. The SEC’s in-house system did not offer juries. Rather, an SEC member or an administrative-law judge was both fact-finder and judge. In 2010, the Dodd-Frank Act amended federal law. For the first time, federal law allowed the SEC to pursue all civil-penalty enforcement actions in house. The SEC filed an in-house enforcement action against George Jarkesy, Jr., and Patriot28, LLC (defendants) for allegedly committing fraud in violation of federal securities laws. After an administrative-law judge heard the case, the SEC issued an order finding that Jarkesy and Patriot28 had committed fraud and imposing $300,000 in civil penalties. On appeal, the Fifth Circuit vacated the order, ruling that the SEC’s in-house process had been unconstitutional for several reasons, including the lack of a jury. The United States Supreme Court granted certiorari.
Rule of Law
Issue
Holding and Reasoning (Roberts, C.J.)
Concurrence (Gorsuch, J.)
Dissent (Sotomayor, J.)
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