The U.S. Supreme Court declared unconstitutional the way the Securities and Exchange Commission imposes fines for fraudulent conduct and requires that wrongdoers give back their ill-gotten gains.
The U.S. Supreme Court, in a 6-3 vote, declared unconstitutional the way the Securities and Exchange Commission imposes fines for fraudulent conduct and requires that wrongdoers give back their ill-gotten gains.
Writing for the court majority, Chief Justice John Roberts said the use of administrative law judges to make factual findings and legal conclusions deprives accused wrongdoers of their Seventh Amendment right to a jury trial.
The court’s decision could have huge ripple effects on dozens of agencies that use ALJs to make factual and legal findings on everything from labor rights to mine safety and energy regulation.
Ironically, the agency is likely to suffer fewer consequences, largely because the Supreme Court, beginning in 2018, began eating away at the agency’s power to use administrative law judges, and the agency, in response, decreased the number of ALJ’s at the agency from six to two, choosing instead to bring its cases mainly in federal court.
