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In a landmark decision, the Supreme Court ruled that individuals accused of securities fraud by the SEC have the right to a jury trial in federal court. This ruling significantly curtails the SEC’s ability to use in-house administrative proceedings, a major tool in its fight against securities fraud. The 6-3 decision, driven by the court’s conservative majority, mandates that fraud cases like that of Houston hedge fund manager George Jarkesy be tried by a jury. This decision could have far-reaching implications for other regulatory agencies that rely on administrative proceedings for civil penalties. |
What did the Supreme Court rule regarding the SEC’s in-house proceedings?
The Supreme Court ruled that individuals accused of securities fraud by the SEC have the right to a jury trial in federal court, limiting the SEC’s use of in-house administrative proceedings.
How did the Supreme Court vote on the SEC case?
The justices ruled in a 6-3 vote, with the conservative majority in favor of mandating jury trials for SEC fraud cases.
What was the impact of the ruling on other regulatory agencies?
The decision could affect other regulatory agencies that impose civil penalties through administrative proceedings, potentially requiring legislative changes.
What was the SEC’s response to the ruling?
The SEC had already reduced the number of cases brought in administrative proceedings pending the Supreme Court’s decision.
How does this ruling affect George Jarkesy’s case?
George Jarkesy’s case, which resulted in significant financial penalties, will now be heard in a federal court instead of by an SEC administrative law judge.
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