Securities and Exchange Commission v. Jarkesy

The Supreme Court case Securities and Exchange Commission v. Jarkesy centers on whether the Securities and Exchange Commission (SEC) can pursue civil penalties through its internal administrative proceedings or if such cases require a jury trial in federal court. The SEC, established in 1934 to prevent fraudulent practices in the securities market, has historically used both federal court lawsuits and internal hearings.

George Jarkesy challenged the SEC's authority, arguing that the Seventh Amendment guarantees a jury trial for cases seeking civil penalties. The Fifth Circuit Court of Appeals agreed with Jarkesy. In June 2024, the Supreme Court affirmed this, ruling that the SEC's pursuit of civil penalties for securities fraud requires a jury trial, as it resembles traditional "suits of common law" rather than the "public rights" exceptions that allow for administrative adjudication. The Court's decision focused on the Seventh Amendment issue, not Jarkesy's other constitutional challenges.1