U.S. Supreme Court Curbs SEC's In-House Judges in Fraud Cases

David Fredrickson’s commentary was included in a Bloomberg article examining how the Supreme Court’s decision rendered in SEC v. Jarkesy, which curbs the Securities and Exchange Commission’s ability to press complaints before in-house judges, will affect federal regulatory powers. David comments on how the decision also raises the question of what constitutes fraud specifically in the securities context.

David explained that many cases that have challenged the agency’s use of administrative proceedings involved fraud allegations, assuming the allegations are similar to common law fraud. “But Congress also authorized the SEC and perhaps other agencies to define things that are fraudulent,” he said. David added that it’s unclear whether fraud allegations that, for example, involve violations of the SEC’s advertising rules or a broker’s failure to provide confirmation of a sale might still go through the administrative process.

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