Jeremiah Williams Discusses SEC In-House Enforcement Proceedings in Pensions Investments

The U.S. Securities and Exchange Commission (“SEC”) has long employed “in-house” judges, or administrative law judges (ALJs), to carry out enforcement proceedings. But the legality of this system is currently under review by the U.S. Supreme Court in Jarkesy v. SEC, which will determine whether ALJs violate Americans’ right to a jury trial.

In a Pensions & Investments article, litigation & enforcement partner Jeremiah Williams discussed the differences between in-house proceedings and the traditional court process. “I think the administrative proceeding is more streamlined. Going through federal court gives defendants more fulsome discovery process and pretrial motions. It’s a little bit of a slower process and it’s more even handed. Once you’re in federal district court, in theory the SEC, the plaintiff, is on the same playing field as far as discovery and things like that.”

He noted that if the Supreme Court rules that the SEC’s use of ALJs is unconstitutional, “you could have more people willing to fight and try their luck,” or refuse to settle SEC charges in jury trials.