Texas Experts: SCOTUS' Jarkesy Decision to Have Limited Impact on SEC Enforcement

Securities Enforcement Defense Team Chair Jessica Magee was quoted in a Texas Lawbook article offering practitioner perspectives on the U.S. Supreme Court's decision that defendants in fraud cases have the right to a civil jury trial when the U.S. Securities and Exchange Commission (SEC) is seeking financial penalties. In ruling as such, the court affirmed the U.S. Court of Appeals for the Fifth Circuit's decision in SEC v. Jarkesy, in which a hedge fund manager argued his Seventh Amendment right to a jury trial was violated when the SEC brought a case against him in one of its in-house courts. Ms. Magee noted that although the justices did deal the SEC a blow, the effects of the decision will probably prove minimal, both because the agency has been moving away from these courts and because she expects future defendants will still prefer to settle cases administratively.

"It's a setback for the SEC, to be sure, especially in the broader context of recent losses like the Fifth Circuit's decision vacating the Private Funds Advisers Rule and litigation challenging its climate disclosure rule," she said. "Practically, though, the SEC has not been filing litigated fraud cases in its own administrative courts for some time."

READ: Texas Experts: SCOTUS' Jarkesy Decision to Have Limited Impact on SEC Enforcement (Subscription required)