SEC v. Jarkesy: Supreme Court Rules SEC Must Use Juries for Civil Penalty Cases

The Supreme Court ruled 6-3 that the SEC violated the Seventh Amendment by imposing civil penalties for securities fraud through its internal administrative law judge tribunals rather than in federal court with a jury. Chief Justice Roberts wrote that securities fraud resembling common-law fraud must be tried before juries, and civil monetary penalties are punitive remedies historically available only in courts of law. Justice Sotomayor's dissent warned that more than two dozen federal agencies use similar in-house proceedings, threatening the entire modern administrative enforcement framework.