Supreme Court Curtails SEC's Civil Fraud Power

The Supreme Court has significantly restricted the Securities and Exchange Commission's ability to fight securities fraud by requiring jury trials for fraud accusations. This decision may affect other regulatory agencies and follows the court's trend of limiting federal regulatory powers.

In a landmark decision on Thursday, the Supreme Court curtailed the Securities and Exchange Commission's (SEC) authority, a ruling that could resonate across various regulatory agencies. The court's 6-3 vote mandates that individuals accused of securities fraud are entitled to a jury trial in federal court, deeming the SEC's in-house proceedings unconstitutional.

Last year, the SEC secured over USD 5 billion in civil penalties, but the impact of this ruling, especially on cases resolved through in-house proceedings, remains uncertain. The agency had already begun reducing administrative cases pending the court's decision.

This ruling arrives amid efforts by conservative and business factions to limit federal regulatory power, a trend the court has supported. The high court's decision overturns a 50-year precedent, further constraining regulators' influence.

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