The Supreme Court limited the reach of Securities and Exchange Commission administrative courts in a decision Thursday that could impact the federal government’s ability to use internal administrative judges.
The 6-3 decision found that the SEC cannot use those internal administrative judges to seek civil penalties for securities law violations because that violates the constitutional right to a jury trial. The majority opinion, written by Chief Justice John G. Roberts Jr., says civil penalties for securities law violations too closely resemble allegations that would normally have to be brought in federal court.
“This is a common law suit in all but name. And such suits typically must be adjudicated in Article III courts,” the majority opinion stated.
