Amid all of the high-profile decisions handed down by the U.S. Supreme Court this year, many people paid little attention to one regarding the Securities and Exchange Commission (SEC). In a 6-3 ruling announced in June, the conservative majority of the court determined that enforcement actions by the SEC involving securities fraud must be handled by federal courts rather than within the agency.
The majority opinion, written by Chief Justice John Roberts, stated that the SECs “internal tribunals” violated defendants’ Seventh Amendment right to a jury trial in certain civil cases. Chief Justice Roberts wrote that a defendant has “the right to be tried by a jury of his peers before a neutral adjudicator.” He added, “Rather than recognize that right, the dissent would permit Congress to concentrate the roles of prosecutor, judge, and jury in the hands of the Executive Branch.”
Is this part of a larger move to “strip’ power from agencies?
The dissent he was referring to, by Justices Sotomayor, Kagan and Jackson, warned that the ruling furthered the high court’s recent pattern of chipping away at federal agencies’ authorities. It stated that “dozens of agencies could be stripped of their power to enforce laws enacted by Congress.”
It’s hard to know whether this will have any significant effect on anyone who is being investigated for or accused of alleged fraud by the SEC. The head of their Enforcement Division responded to the ruling by saying that the agency will “continue to protect investors and enforce the federal securities laws, including by filing actions in federal court.”
What remains critical is that if you are under investigation for alleged fraud or have already been arrested and charged, you need sound legal guidance as soon as possible. This will help you protect your rights, regardless of where the case may ultimately be decided.
