The SEC Might Lose Its Courts

Tomorrow the US Supreme Court will hear arguments in a case about whether the US Securities and Exchange Commission can fine people without a jury trial. The SEC can bring “administrative proceedings” in its own in-house courts, in front of SEC employees called administrative law judges, rather than bringing them in regular courts. A lot of people think that this is unfair, and in the political and legal climate of 2023, arguments like “this administrative agency has too much power to regulate” go a lot further than they used to.

And so a guy named George Jarkesy allegedly did some quite garden-variety fraud with boiler-room operator Thomas Belesis, and the SEC brought an administrative case against him a decade ago, and he fought the case by arguing that the SEC should have to sue him in real court, and last year he won that argument in a federal appeals court in Texas. We talked about it at the time. And now the SEC has taken it to the Supreme Court.