SEC v. Jarkesy: Constitutionality of Administrative Enforcement Actions (CRS Report for Congress)
| Release Date |
Sept. 16, 2024 |
| Report Number |
LSB11229 |
| Report Type |
Legal Sidebar |
| Authors |
Daniel T. Shedd |
| Source Agency |
Congressional Research Service |
Summary:
Congress frequently delegates to agencies the power to take enforcement actions against parties who do
not comply with applicable statutes or regulations that the agencies administer. For decades, Congress has
enacted statutes that authorize regulatory agencies to impose civil penalties for certain violations. In many
of those instances, the relevant statute requires the agency to pursue such penalties through a legal action
filed in federal court. Congress has also authorized some agencies to bring enforcement actions before the
agencies’ own in-house adjudicatory systems. The circumstances under which Congress may authorize
agencies to bring in-house enforcement actions was the subject of Securities and Exchange Commission
(SEC) v. Jarkesy. In June 2024, the Supreme Court ruled 6-3 in Jarkesy that the Seventh Amendment’s
right to a jury trial applies to certain enforcement actions brought by an agency and, therefore, in-house
administrative adjudication of such actions is unconstitutional. This Sidebar discusses Jarkesy and its
implications for Congress and federal agencies.
