Securities and Exchange Commission v. Jarkesy

[Jason Harvestdancer]

Somehow I didn't notice this until today, but this case before the Supreme Court has enormous implications if decided a certain way, for it is an attack on the entire administrative state.

SEC v. Jarkesy: The Threat to Congressional and Agency Authority - American Progress

On November 29, 2023, the U.S. Supreme Court will hear oral arguments in Securities Exchange Commission (SEC) v. Jarkesy, a case that could have significant effects on government’s ability to effectively serve the American people should the court choose to eliminate administrative law judges (ALJs) and resurrect the nondelegation doctrine. There are nearly 2,000 ALJs working as independent officials within the executive branch who preside over administrative hearings in a variety of federal agencies and adjudicate disputes between the agencies and affected parties. In this case, an SEC ALJ found that two hedge funds established by George Jarkesy committed securities fraud against investors. The SEC fined Jarkesy and other parties $300,000; required disgorgement of $685,000 in ill-gotten gains, which the SEC Board of Commissioners upheld; and barred Jarkesy from participating in the securities industry. The U.S. Court of Appeals for the 5th Circuit reversed the decision in an extreme ruling, holding that not only are SEC ALJs unconstitutional, but that Congress lacks the power to give the SEC the ability to adjudicate securities fraud cases under the nondelegation doctrine.

They talk about it as if it is a bad thing. However, that one is an editorial so I'll also include a couple of sources that are more objective.

Supreme Court Bulletin - Securities and Exchange Commission v. Jarkesy - Legal Information Institute
 SEC v. Jarkesy

The ability of agencies to create administrative law is under attack with this case. I've often thought that all administrative law should be submitted to congress for review on a regular basis to be passed as legislative law or dispensed with. This goes farther than that. Interesting.

 

[Rhea]

Do you think that could be one of the possible rulings? That ALJ rulings should be periodically submitted for legislation? Or do you think they’ll just bust the system and make it so no one can adjuticate securities fraud?

 

[scombrid]

Administrative agencies should not exist. Or at least MTG and Boebert should decide the EPA regs. Anarchocapitalism is the goal. Whoever has the most money makes the rules.

 

[zorq]

Should the executive branch actually wield ANY executive power? Or is it just there to veto Congress once in a while?

I think the executive branch should have some actual executive power and if congress has a problem with that power they may challenge it using their own powers. Yes congressional laws should trump (I hate using that word) "administrative law" but until congress challenges it, administrative law should stand under the power of the executive branch. Because these agencies ARE part of the executive branch even if they are described as "Independant" and congress has already given them the authority to act legally in the laws it passed that founded them.

 

[Harry Bosch]

Administrative agencies should not exist. Or at least MTG and Boebert should decide the EPA regs. Anarchocapitalism is the goal. Whoever has the most money makes the rules.

Very much agree. Gut all government agencies. Put congress in charge. MTG and Boebert have proven their grit and effectiveness in gutting the diabolical schemes planned by Hunter Biden and his ilk.

 

[Bomb#20]

...
They talk about it as if it is a bad thing. However, that one is an editorial so I'll also include a couple of sources that are more objective.

Supreme Court Bulletin - Securities and Exchange Commission v. Jarkesy - Legal Information Institute
...

"During these administrative proceedings, the SEC acts as both the prosecutor and the judge."

Nemo iudex in causa sua - Wikipedia

en.wikipedia.org

..."no one is judge in their own case". Originating from Roman law, it was crystallized into a phrase by Edward Coke in the 17th century and is now widely regarded as a fundamental tenet of natural justice and constitutionalism.
...
The maxim has been invoked by the United States Supreme Court in various cases, such as the 1798 case Calder v. Bull ("a law that makes a man a Judge in his own cause [...] is against all reason and justice") and the 1974 case Arnett v. Kennedy ("we might start with a first principle: '[N]o man shall be a judge in his own cause.'

 

[Jimmy Higgins]

So I take it, he is so guilty that he needs to try and disprove the court's own existence as seen through the Constitution, instead of appealing to Court of Appeals the merits of his actual crimes.

This reads out like one of those, "there is no law that lets the Government charge income tax" arguments.

This judge also decided the FDA doesn't get to say what is and isn't safe medicine wises, unless she gives her stamp of approval. The Fifth Circuit is out of its fucking mind.

 

[Gospel]

hmm, Is it impractical for states to appoint their own judges & prosecutors in cases where the state itself is involved? Rumor has it they even get to pick their own Jurors.

 

[Bomb#20]

So I take it, he is so guilty that he needs to try and disprove the court's own existence as seen through the Constitution, instead of appealing to Court of Appeals the merits of his actual crimes.

By "his actual crimes", you mean the crimes he was convicted* of by a judge who is employed by the prosecutor? ALJs almost always rule for the agency; juries and federal judges are a lot more likely to rule for the defendant.

As far as appealing on the merits goes, that's not really the business a Court of Appeals is in. To lodge an appeal you're generally supposed to claim the lower court made an error of law. Questions of fact are supposed to be decided by juries, or trial judges when there's no jury.

(* Loosely speaking. Technically there was no conviction of a crime since in spite of the fine, this was technically a civil lawsuit.)

 

[Loren Pechtel]

This is a case where I think a middle ground should exist.

Requiring proving things in court for all the things that are currently done administratively would be a nightmare. However, I think there should always be the recourse of court--if you feel the administration has been done improperly you should have a means of getting it before a jury. (And there are plenty of examples of this--states improperly pushing costs onto those who wish to do something, requiring them to do something unrelated in order to get approval for what they want to do.)

 

[Jason Harvestdancer]

hmm, Is it impractical for states to appoint their own judges & prosecutors in cases where the state itself is involved? Rumor has it they even get to pick their own Jurors.

Kind of a straw man version of administrative agencies having administrative courts.