SEC v. Jarkesy

Decided•22-859•October Term 2023•6-3

Lower Court: Fifth Circuit • Last updated: June 27, 2024

Plain-Language Summary

The Court ruled that people accused of securities fraud by the SEC have a right to a jury trial in federal court, rather than being tried by an administrative law judge within the agency. The Seventh Amendment guarantees the right to a jury in certain cases, and the Court found this protection applies to SEC enforcement actions seeking financial penalties.

This means the SEC can no longer use its own in-house judges to handle fraud cases where it seeks monetary penalties. Instead, these cases must go to federal court where defendants get a jury.

Vote Breakdown

Majority

Dissent

6-3

Majority (6)

Roberts(author)

Gorsuch (concurrence)

Thomas (concurrence)

Dissent (3)

Sotomayor

Kagan

Jackson

Why This Matters

This decision significantly limits the SEC's enforcement power and could affect other federal agencies that use in-house judges. It shifts power from agencies to the courts and gives more protections to people accused of financial wrongdoing. The ruling is part of a broader trend of the Court limiting the power of federal agencies.