The 5th Circuit Court of Appeals on Wednesday ruled the Securities and Exchange Commission (SEC) is denying defendants their constitutional right to a jury trial by putting them in front of its own internal judges.
In a 2-1 ruling, the court ruled for George Jarkesy and Patriot28 LLC, who sued the SEC in 2011 after the agency imposed a $300,000 fine and other punishments in a securities fraud case.
Judge Jennifer Walker Elrod wrote in the majority opinion that the SEC violated the Seventh Amendment’s right to a jury trial by bringing defendants before in-house judges and allowing the agency to “act as both prosecutor and judge.”
Congress also unconstitutionally delegated power to the SEC to act as a legislative body, Elrod wrote. [bold added] More