US Supreme Court Curbs SEC’s In-House Judges in Fraud Cases
- 6-3 decision is a blow to commission’s administrative system
- Majority held that damages claims should go before a jury
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The US Supreme Court curbed the Securities and Exchange Commission’s ability to press complaints before in-house judges, saying defendants have a constitutional right to make their case to a federal jury when the agency is seeking financial penalties.
The 6-3 decision could reduce the commission’s leverage to extract high-dollar settlements. It deals a blow to an administrative system the SEC once used to adjudicate more than 100 cases a year before scaling back amid legal challenges.