LI Network
Published on: December 06, 2023 at 12:47 IST
The US Supreme Court is currently deliberating the second of three cases this term that could have significant implications for federal regulatory authorities.
The conservative majority bench, with a 6-3 composition, expressed skepticism about the regulatory powers of the Securities and Exchange Commission (SEC) in Wednesday’s hearing.
The case in question challenges the tribunal system employed by the SEC to adjudicate fines issued by the agency. The plaintiff, George Jarkesy, founder of an investment fund, had been fined $300,000 for securities fraud and ordered to repay $685,000 in “illicit gains.”
A federal appeals court, known for its conservative stance, previously ruled in favor of Jarkesy, leading to the current Supreme Court discussion. The focal point of the debate revolves around whether the SEC’s authority, granted by Congress to impose sanctions through its administrative judges, infringes on the Seventh Amendment’s right to a trial by jury.
During the hearing, Chief Justice John Roberts and other conservative judges raised objections to the Justice Department’s call for a complete annulment of the appeals court decision.
Judge Brett Kavanaugh questioned the inconsistency in applying constitutional protections when facing a private lawsuit versus government actions seeking the same monetary penalties.
The court reflected on the evolution of government agencies’ impact on daily life over the last 50 years, emphasizing the need to reassess outdated rulings. Two additional cases on federal regulatory authority are scheduled for a decision this term, maintaining the conservative majority’s influence.
In a previous hearing on October 3, the court cast doubt on arguments supporting the constitutionality of funding for the Consumer Financial Protection Bureau (CFPB).
The upcoming January docket includes a case related to herring fishermen in New England compelled to accommodate observers from the National Marine Fisheries Service (NMFS) on their vessels.
The Supreme Court is expected to issue rulings on these cases by the end of June 2024.