Evolution of Administrative Adjudication Post-Jarkesy | Optimizing SEO

The landscape of securities enforcement is changing following the recent Supreme Court decision in SEC v. Jarkesy, et al. On June 27, 2024, the Court ruled 6-3, putting an end to the Securities and Exchange Commission’s (SEC) use of in-house Administrative Law Judge (ALJ) tribunals in cases involving fraud allegations seeking civil penalties. This decision, based on the Seventh Amendment, now mandates that defendants have the right to a trial by jury when facing civil penalties for securities fraud, shifting these cases to be heard in a court of law rather than by an ALJ tribunal.

This decision has significant implications for the SEC, as it requires them to bring more cases involving financial penalties for misleading investors to court rather than utilizing their traditional in-house tribunals. This move marks a clear shift in how the SEC will pursue enforcement actions moving forward.

For more insights and analysis on this topic, you can access the full article in The Investment Lawyer. This decision is a crucial turning point in the evolution of administrative adjudication, reshaping how securities fraud cases are adjudicated in the United States.