The Supreme Court strips the SEC of a critical enforcement tool in fraud cases

abcnews.go.com:

The Supreme Court has stripped the Securities and Exchange Commission of a major tool in fighting securities fraud in a decision that also could have far-reaching effects on other regulatory agencies

WASHINGTON — WASHINGTON (AP) — The Supreme Court on Thursday stripped the Securities and Exchange Commission of a major tool in fighting securities fraud in a decision that also could have far-reaching effects on other regulatory agencies.

The justices ruled in a 6-3 vote that people accused of fraud by the SEC, which regulates securities markets, have the right to a jury trial in federal court. The in-house proceedings the SEC has used in some civil fraud complaints violate the Constitution, the court said.

The SEC was awarded more than $5 billion in civil penalties in the 2023 government spending year that ended Sept. 30, the agency said in a news release. It was unclear how much of that money came through in-house proceedings or lawsuits in federal court.

The agency had already reduced the number of cases it brings in administrative proceedings pending the Supreme Court's resolution of the case.

The case is among several this term in which conservative and business interests are urging the nine-member court to constrict federal regulators. The court’s six conservatives already have reined them in, including in a decision last year that sharply limited environmental regulators' ability to police water pollution in wetlands.

The high court rejected arguments advanced by President Joe Biden's Democratic administration that relied on a 50-year-old decision in which the court ruled that in-house proceedings did not violate the Constitution’s right to a jury trial in civil lawsuits.

The justices ruled in the case of Houston