The Securities and Exchange Commission (SEC) filed a writ of certiorari asking the Supreme Court of the United States (SCOTUS) to review a decision out of the Fifth Circuit. The ruling in Jarkesy v. Securities and Exchange Commission (Jarkesy) complicates the use of administrative law judges (ALJs) by federal agencies, including the Consumer Financial Protection Bureau (CFPB). An SEC ALJ decided the petitioners had committed securities fraud. A review by the SEC affirmed that finding before the appeal was taken to the Fifth Circuit. The Fifth Circuit vacated the SEC’s decision and denied a rehearing en banc.  

Now, with a petition for review before the Supreme Court, the questions presented could result in consequences for the CFPB and other federal agencies’ use of ALJs: 

  1. “Whether statutory provisions that empower the Securities and Exchange Commission (SEC) to initiate and adjudicate administrative enforcement proceedings seeking civil penalties violate the Seventh Amendment.  
  2. Whether statutory provisions that authorize the SEC to choose to enforce the securities laws through an agency adjudication instead of filing a district court action violate the nondelegation doctrine. 
  3. Whether Congress violated Article II by granting for-cause removal protection to administrative law judges in agencies whose heads enjoy for-cause removal protection.”*

To view the full details of the SEC’s writ of certiorari petition, please visit this link.