Securities and Exchange Commission’s (SEC) v. Jarkesy threatens to hamper the SEC’s ability to regulate industry and will undermine essential oversight

Washington, D.C. — Today, the Supreme Court heard oral arguments in SEC v. Jarkesy. As highlighted in their remarks before the Court, the plaintiffs in this case seek to hamstring the SEC’s enforcement abilities with three separate, dubious claims that the Court will then decide. First, if the SEC’s long-standing use of administrative law judges (ALJs) to adjudicate fraud claims violates the Seventh Amendment right to a jury. Second, if laws that allow the SEC to enforce through agency adjudication rather than filing a lawsuit violate the “nondelegation doctrine;” and third, if Congress violated Article II of the Constitution by creating structures where both an agency-head and officers like ALJs have for-cause removal protection. An unfavorable outcome on any of the three arguments advanced in this case would provide yet another tool to attack, delay, and hamstring the ability of agencies to protect the people and communities they were created to serve by using ALJs.

In response to oral arguments, Democracy Forward President & CEO Skye Perryman released the following statement:

“Plaintiffs are asking the Court to upend decades of precedent and numerous governing structures Congress has created. As several justices noted, this case could have significant implications for a wide range of agencies and public protections – from programs like Social Security to important consumer and workplace protections. We hope the Supreme Court rejects this attempt to hamstring the government’s ability to protect the people and communities they were created to serve.”