On June 27, 2024, the United States Supreme Court (the “Court”) affirmed the Fifth Circuit’s ruling in SEC v. Jarkesy and held that a defendant facing civil penalties in a securities fraud claim brought by the Securities and Exchange Commission (the “SEC”) has a right to a jury trial in a federal court.¹ Specifically, the Court held that the SEC’s attempt to compel respondents to defend themselves before the agency, namely in an administrative proceeding before an Administrative Law Judge (“ALJ”) employed by the SEC, violates respondents’ Seventh Amendment right to a jury trial in cases where the SEC pursues civil penalties. Accordingly, this decision will likely limit the number of future SEC actions adjudicated by an ALJ in an administrative forum due to the restriction on the available remedies.Continue Reading SEC v. Jarkesy: A Divided Supreme Court Holds That the SEC Cannot Seek Civil Penalties through an Administrative Proceeding