November 30, 2023

Supreme Court Questions SEC Ability to Conduct In-house Adjudications

There is a massive Seventh Amendment case before the Supreme Court right now that could have some wide-ranging implications.

The court is about to hear a case brought by hedge fund manager and conservative radio jockey George Jarkesy.

The Securities and Exchange Commission barred Jarkesy after it had concluded he committed securities fraud.

Challenge Card

After Jarkesy was barred from the industry, with the SEC serving as judge and jury in the case, Jarkesy petitioned the court to review the case to see if the SEC was capable of carrying out such actions on its own.

Jarkesy is now claiming that his constitutional rights were violated since he was not given a jury trial.

Jarkesy has already had success at the appellate level, and it appears as though he will enjoy even more success with the Supreme Court.

Chief Justice Roberts stated, “The government is much more likely to affect you or proceed against you in one of its own agencies than it is in court.

“It does seem to me to be curious that, and unlike most constitutional rights, that you have that right [to a jury trial] until the government decides it doesn’t want you to have it. That doesn’t seem to me the way the Constitution traditionally works.”

Justice Gorsuch also leaned in this direction, stating, “A right to trial by jury … is a check on all branches of government. An ancient right, too."

This case has brought to light just how unfair this agency court has been, with Jarkesy’s attorneys writing, "The agency court in Jarkesy had a nearly spotless record — always ruling for the agency.

"When Jarkesy’s case went to trial, the agency had won the last 200 times."

Liberal justices, of course, have hinted toward leaning for the government, with Justice Sotomayor stating, “We have permitted the public interest to be protected in an administrative proceeding.”

In cases such as this, it is always important to see where Justice Roberts stands because one of Trump’s appointees always seems to follow Roberts’ opinion.

Based on what Roberts has said thus far, it looks like the case will fall in favor of Jarkesy, then it just remains a matter of time before other government agencies are challenged on this front, with more than two dozen of them having a similar system in place.

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