The US Securities and Exchange Commission (SEC or Commission) is an independent agency that investigates potential violations of the federal securities laws.
If the decision stands, it would severally hamper the SEC’s enforcement efforts in in the Fifth Circuit which includes Texas, Louisiana, and Mississippi, effectively preventing the agency from using its established mechanisms to issue civil penalties in those states.
On May 18, 2022, the U.S. Court of Appeals for the Fifth Circuit in Jarkesy v. SEC issued a scathing rebuke of the Securities and Exchange Commission's ("SEC") use of administrative law judges ("ALJ").
the U.S. Court of Appeals for the Fifth Circuit held the SEC violates the constitution when it brings civil securities fraud charges before its own Administrative Law Judges ALJs, decision will almost certainly be appealed to the U.S. Supreme Court.
Key Takeaways - ..The U.S. Supreme Court is poised to hear cases that may curtail the administrative powers of the SEC. ..These rulings may portend greater.