In Law360, Jeremiah Williams and Alyssa Fixsen Examine Impact of SEC v. Jarkesy

In an article for Law360, litigation & enforcement partner Jeremiah Williams and associate Alyssa Fixsen examined the impact of the recent U.S. Supreme Court opinion in U.S. Securities and Exchange Commission v. Jarkesy. The opinion held that there is a constitutional right to a jury trial in an Article III court for fraud cases and other claims that have a common law nexus, will have a muted impact in SEC enforcement actions because the SEC is already bringing most of its cases in federal court.

“For those litigating against the SEC, federal courts provide many important benefits over administrative proceedings, so it is noteworthy that Jarkesy gives defendants a constitutional right to an Article III court” noted Jeremiah and Alyssa. “However, in practical terms, the effect of Jarkesy is diminished because the SEC has already shifted nearly all of its cases to federal courts.”

The authors also noted, “The SEC also retains key structural advantages in its investigatory and regulatory powers that provide a strong incentive to settle rather than litigate. Accordingly, while the constitutional right enumerated in Jarkesy is extremely important, the impact on SEC enforcement actions will be modest.”