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Supreme Court Rules 6-3: SEC Must Use Jury Trials in Fraud Cases

Jun 27, 2024, 10:45 PM

The U.S. Supreme Court has ruled that the Securities and Exchange Commission (SEC) cannot use in-house judges for civil fraud complaints, mandating that defendants are entitled to a jury trial in federal court. This decision, reached with a 6-3 majority, significantly impacts the SEC's enforcement capabilities. The ruling in the case of SEC v. Jarkesy asserts that the SEC's practice of using administrative law judges violates the Seventh Amendment, which guarantees the right to a jury trial in fraud cases. This landmark decision curbs the SEC's power to unilaterally impose fines and could lead to increased litigation as defendants now have the right to present their cases to a jury of their peers.