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MI Responds: SCOTUS Rulings on SEC Prosecutions

NEW YORK, NY – This morning, the Supreme Court issued decisions in several cases, including SEC v. Jarkesy. Manhattan Institute legal scholars offer the following comments:

Ilya Shapiro, senior fellow and director of constitutional studies at the Manhattan Institute, on SEC v. Jarkesy:

"It should be a no-brainer than when the government seeks to impose severe fines for violating federal law, the target of its prosecution should get his day in court. And yet, the SEC has been satisfying itself with an internal kangaroo court where—surprise, surprise—it wins nearly every time. It’s too bad that the Supreme Court didn’t address the obvious separation-of-powers problems inherent in a system where the same agency legislates, investigates, prosecutes, judges, and punishes, but it’s absolutely right that this is a Seventh Amendment jury-right violation. And for those who see this as some plutocratic conspiracy against the enforcement of securities laws, Justice Gorsuch aptly points out in his concurrence that the ruling 'hardly leaves the SEC without ample powers and recourse. The agency is free to pursue all of its charges against Mr. Jarkesy. And it is free to pursue them exactly as it had always done until 2010: In a court, before a judge, and with a jury.'"

James R. Copland, senior fellow and director of legal policy at the Manhattan Institute, on SEC v. Jarkesy:

"As I explained in my 2020 book The Unelected, the modern federal administrative state concentrates power in the executive branch. Although we think of the executive as enforcing the laws Congress enacts, today it often writes its own rules and even adjudicates its own enforcements. Today’s salutary decision in SEC v. Jarkesy is the latest Supreme Court opinion pushing back on the latter phenomenon: the federal government’s securities enforcement agency will now need to prosecute wrongdoers in court, in front of a jury, rather than in the agency’s own 'courts' reporting to executive branch appointees. Although today’s decision is rooted in the Seventh Amendment right to a jury trial rather than the separation-of-powers concerns emphasized in the amicus brief we joined, the end result is a victory for the rule of law that places modest new limits on the regulatory behemoth."

Read the Manhattan Institute's full amicus brief in SEC v. Jarkesy here.

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