Jarkesy May Thwart Consumer Agencies' Civil Penalty Power

Litigation attorneys Brian Goodrich, Ceijenia Cornelius and Morgan Delabar co-authored a Law360 article exploring the U.S. Supreme Court’s landmark ruling in U.S. Securities and Exchange Commission (SEC) v. Jarkesy. This decision mandates that the SEC bring civil penalty actions for securities fraud to federal court, guaranteeing defendants a Seventh Amendment right to a jury trial, rather than resolving these matters in internal administrative hearings. The article delves into Jarkesy's broader implications for not only the SEC but also other federal agencies such as the Federal Trade Commission (FTC), Federal Deposit Insurance Corporation (FDIC) and Consumer Financial Protection Bureau (CFPB), potentially challenging their ability to enforce civil monetary penalties through administrative proceedings. The authors explain how this shift could introduce new strategic considerations for agencies in their regulatory enforcement practices.

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