Conservative Supreme Court justices seem open to an attack on the Securities and Exchange Commission
Conservative Supreme Court justices seem open to a challenge to how the Securities and Exchange Commission fights fraud, in a case that could have far-reaching effects on other regulatory agencies
WASHINGTON — Conservative Supreme Court justices on Wednesday seemed open to a challenge to how the Securities and Exchange Commission fights fraud, in a case that could have far-reaching effects on other regulatory agencies.
A majority of the nine-member court suggested that people 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 justices heard more than two hours of arguments in the Biden administration’s appeal of a lower-court ruling that threw out stiff financial penalties imposed on hedge fund manager George R. Jarkesy by the SEC, which regulates securities markets.
“That seems problematic to say that the government can deprive you of your property, your money, substantial sums in a tribunal that is at least perceived as not being impartial,” Justice Brett Kavanaugh said.
Justice Department lawyer Brian Fletcher warned the justices that their decision could have effects reaching far beyond the SEC, noting that roughly two dozen agencies have similar enforcement schemes.
“I don't want you to think it's just about the SEC,” Fletcher said.
The case is just one of several this term in which conservative and business interests are urging the court to constrict federal regulators. The court’s six conservatives already have reined them in, including in May’s decision sharply limiting their ability to police water pollution in wetlands.
In the Jarkesy case, the Democratic administration is relying on a
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