Supreme Court Chips Away at the SEC’s Power: Stephen L. Carter

Things just got a little harder for the Securities and Exchange Commission, which henceforth must seek certain civil damages for securities fraud by going to federal court, rather than through its own internal adjudicatory process. That’s the upshot of the US Supreme Court’s decision in Securities and Exchange Commission v. Jarkesy, which held unconstitutional — under the Seventh Amendment — a provision of Dodd-Frank that allowed the SEC to pursue unregistered advisers without a jury trial.

The result, although entirely predictable and probably correct, might play havoc with much more than this tiny corner of the regulatory state.

George Jarkesy ran two ...