The US Supreme Court’s conservative majority cast doubt on the Securities and Exchange Commission’s use of in-house judges, hearing arguments in a case that could strip the agency of a key enforcement tool.
In a session that lasted more than two hours, the justices suggested that people accused of fraud by the SEC have a constitutional right to go before a federal court jury, at least when the commission is seeking civil penalties.
“It seems problematic to say the government can deprive you of your property, your money, substantial sums in a tribunal that is at least perceived as not being impartial,” Justice Brett Kavanaugh said.
The dispute is part of a Supreme Court term likely to have broad implications for federal regulators. The justices are also considering whether the Consumer Financial Protection Bureau’s funding system is constitutional and whether to overturn a precedent that gives agencies leeway when they interpret ambiguous congressional commands.
