The U.S. Supreme Court is set to hear an appeal by President Joe Biden’s administration challenging a lower court’s ruling that restricts the Securities and Exchange Commission’s (SEC) power to enforce securities laws through its in-house tribunal system. The case involves hedge fund manager George Jarkesy, who was fined and barred from the industry by the SEC for committing securities fraud. Critics argue that the SEC’s in-house system gives it an unfair advantage in prosecuting cases.
The case has significant implications for the SEC’s ability to root out wrongdoing in the securities industry. A separate challenge against the Financial Industry Regulatory Authority (FINRA) is also being considered by lower courts. Conservatives and business groups support these challenges, expressing concerns about the reach of federal regulatory power. The SEC has faced other legal attacks despite the Supreme Court’s conservative majority signaling skepticism towards expansive federal regulatory power.