SECURITIES AND EXCHANGE COMMISSION V. JARKESY

ANALYSIS AND IMPLICATIONS FOR CALIFORNIA ENVIRONMENTAL ENFORCEMENT

Written by Sara Dudley¹

On June 27, 2024, the Supreme Court of the United States announced its decision in Securities and Exchange Commission v. Jarkesy.² The Court granted certiorari to answer a single question: Does the Seventh Amendment entitle a defendant to a jury trial when the Securities and Exchange Commission (SEC) seeks civil penalties for securities fraud? However, of course, a ruling by the Supreme Court is never quite so innocuous or narrow. Rather, the case speaks to the authority of a federal administrative agency to pursue enforcement actions internally before an administrative law judge (ALJ) or whether such actions must be tried before a jury in a federal court.

Ruling for Jarkesy, the Court held that a "defendant facing a fraud suit has the right to be tried by a jury of his peers before a neutral adjudicator."³ This article analyzes the Court’s majority opinion, reviews the concurrence to mine the Court’s thinking as to other potential causes of action by future defendants and considers Jarkesy’s implications for California environmental law.