On June 27th, in SEC v. Jarkesy, the US Supreme Court ruled that defendants are entitled to a jury trial where the SEC seeks monetary penalties for securities fraud and that subjecting such a defendant to an administrative proceeding violates the Seventh Amendment’s right to a jury trial. 

Schulte Roth & Zabel partner and former branch chief in the SEC’s Enforcement Division, John Nowak, told Hedge Fund Alert that “[f]or those with interests in litigating matters with the SEC, it’s a win.” But practically speaking, he indicated the decision does not “disrupt things tremendously.”  John anticipates that the SEC will continue to bring cases outside the scope of the Supreme Court’s ruling before in-house tribunals. 

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