Supreme Court to Hear Case That Could Upend Administrative Courts’ Power

The U.S. Supreme Court is set to hear oral argument on the constitutionality of administrative law courts within the Securities and Exchange Commission (SEC) on Nov. 29 — teeing up yet another opportunity this term for justices to review bureaucrats' power.

SEC v. Jarkesy involves a hedge fund manager, George Jarkesy, whom the agency penalized for violating securities fraud law. More specifically, the SEC imposed a civil penalty of $300,000 on Mr. Jarkesy after bringing an administrative proceeding against him.

The agency ultimately agreed with the administrative law judge's conclusion that Mr. Jarkesy had violated securities law.

Mr. Jarkesy appealed his case and won in the U.S. Court of Appeals for the Fifth Circuit, which held that the SEC's actions were unconstitutional in several ways.

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