A challenge to the U.S. Securities and Exchange Commission's powers to protect investors from fraud comes before the Supreme Court on Wednesday in another in a series of legal attacks against federal agencies that regulate financial markets, Reuters reported. The justices are due to hear arguments in an appeal by President Joe Biden's administration of a lower court's ruling restricting the SEC's power to enforce securities laws through the agency's longstanding in-house tribunal system. The case involves hedge fund manager George Jarkesy, who the SEC fined and barred from the industry after determining he had committed securities fraud. Critics of the agency have argued that its in-house system gives it the unfair advantage of prosecuting cases before its own judges rather than before a jury in federal court. The New Orleans-based U.S. Court of Appeals for the Fifth Circuit in 2022 ruled in favor of a legal challenge brought by Jarkesy. The 5th Circuit decided that the SEC's power to seek penalties through in-house enforcement proceedings violates the U.S. Constitution's Seventh Amendment right to a jury trial and infringes on presidential and congressional powers.
