On June 27, 2024, the Supreme Court issued a landmark decision in SEC v. Jarkesy, which held that a defendant is entitled to a jury trial under the Seventh Amendment when the SEC seeks civil penalties for securities fraud. The decision thus limits the SEC’s ability to impose monetary penalties in administrative enforcement proceedings.
The opinion, authored by Chief Justice Roberts, holds that the Seventh Amendment right to a jury trial extends to SEC enforcement proceedings seeking “civil penalties” because such penalties are “legal in nature”; they both resemble traditional common law fraud claims, and are designed to obtain a remedy of the sort traditionally obtained in a court of law. The Court further concluded that the public rights exception to the Seventh Amendment did not apply because the rights at issue were private rights (akin to common law fraud claims) and not public rights.
In the latest episode of our podcast Court Briefs, host Kannon Shanmugam, joined by Abigail Frisch Vice, delves into this decision and its implications.
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