ELR Citation: 54 ELR 20096
No(s). 22-859 (U.S. Jun 27, 2024)

The U.S. Supreme Court, 6-3, held the Seventh Amendment entitled an investment advisor to a jury trial in an enforcement action initiated by the Securities and Exchange Commission (SEC) seeking civil penalties for securities fraud. The SEC adjudicated the matter administratively, and determined the advisor had committed securities violations and levied a $300,000 civil penalty. The advisor petitioned for review, and the Fifth Circuit vacated the order on the ground that the agency adjudication violated the advisor's right to a jury trial. The Supreme Court found the action implicated the Seventh Amendment because the SEC's antifraud provisions replicated common-law fraud and it was well established that common-law claims must be heard by a jury; and that the "public rights" exception did not apply because the action here did not fall within any of the distinctive areas involving governmental prerogatives where the Court has concluded that a matter may be resolved outside of an Article III court, without a jury. It held the Seventh Amendment applied and a jury was required. The Court affirmed the Fifth Circuit ruling and remanded for further proceedings. Roberts, C.J., delivered the opinion of the Court, in which Thomas, Alito, Gorsuch, Kavanaugh, and Barrett, JJ., joined. Gorsuch, J., filed a concurring opinion, in which Thomas, J., joined. Sotomayor, J., filed a dissenting opinion, in which Kagan and Jackson, JJ., joined.