Supreme Court rule The U.S. Securities and Exchange Commission (SEC) on Thursday wants those it seeks civil penalties for alleged fraud violations to be entitled to a jury trial. This decision, while significant in isolation, could have ramifications far beyond the confines of the agency.
At the center of the ruling is George Jarkesy Jr., a hedge fund manager who oversees investment advisory firm Patriot28, LLC. The SEC accused him and the firm of “misrepresenting the investment strategies employed by Jarkesy and Patriot28,” “lying about the identities of the fund’s auditors and prime brokers,” and “exaggerating the claimed value of the funds.” However, no matter what you think of the allegations, here’s how the SEC handled the matter: reasonJacob Salem highlight Earlier today, the company, which was, to put it mildly, distasteful, included internally evaluating its allegations, confirming them, and then imposing a $300,000 fine. That’s not to say Jaxey didn’t do anything wrong. In other words, it is unfair for the SEC to evaluate the SEC’s allegations.
The decision was made along ideological lines, with Justice Sonia Sotomayor issuing a dissenting opinion. It’s an interesting split. Sotomayor has a strong record on related criminal justice issues and defendants’ constitutional rights. She wasn’t the only one to do so: Judge Ketanji Brown Jackson, for her part, as a lawyer, wrote an undergraduate thesis on the coercive nature of plea bargains, in which the jury was conspicuously absent. represent The client is being held at Guantanamo Bay, where prisoners are held without charge or trial.
But Sotomayor said the requirement for a jury trial in a civil setting, as outlined in the Seventh Amendment, is a “power grab.” She was right, but not in the right way. It takes power from the federal government—which, in a sense, has a monopoly on it—and gives some of it back to the people. As Justice Neil Gorsuch acknowledged in a unanimous opinion, Jaxey was likely unsympathetic. But even hedge fund managers who may be less popular should have the same basic rights.
Those dissatisfied with today’s ruling may be frustrated because the core legal principles will almost certainly not be subject to the SEC’s restrictions. But in turn, they may be surprised to learn that these defendants were not always cartoon images of corporate greed.
In the case of Sun Valley Orchards, the fourth-generation farm run by brothers Joe and Russell Marino, a Department of Labor administrative law judge ordered The farm must pay more than $550,000 to the government. Much of the amount was in response to clerical irregularities.
A contractor failed to disclose on the company’s form for the H-2A visa program, which allows employers to hire immigrants for temporary agricultural work, that it would provide a meal plan for immigrant workers. It is not illegal to do so, and Sun Valley does not charge employees more than allowed under federal regulations. This was a clerical error, and unless the owner was able to overturn the Department of Labor’s conclusion in front of a jury, the owner would find himself in financial ruin. Their case, which received a lifeline today in the form of a Supreme Court ruling, is pending before the U.S. Court of Appeals for the Third Circuit.
“Today’s decision is loud and clear: If the government wants to punish people by taking their money, it has to go to a real court, with real judges and Juries. “The government had argued that cases in which the government imposed fines fell within the ‘public rights’ exception to the right to a jury, but the court rejected that theory. That’s exactly what a jury is needed when the government seeks to impose fines. “
This has not trickled down to some of the broader areas Progressive tendencies corner Supreme Court Comment. But ultimately, it doesn’t matter whether the defendant is compassionate or not. The point is, however, that if you care about democracy and safeguarding the rights of the little guy, it’s not that difficult to try to preserve the executive’s monopoly power to sanction the public.
Much of the resistance essentially boils down to the following concern, however well-intentioned it may be: “This will make the government’s job harder.” To which I say, “Yes.” And rightly so.
