Conservative U.S. Supreme Court justices on Wednesday signaled skepticism toward the legality of certain proceedings conducted in-house by the Securities and Exchange Commission to enforce investor-protection laws - a case that gives them an opportunity to further undercut the power of federal agencies, Reuters reported. The court, which has a 6-3 conservative majority, heard arguments in an appeal by President Joe Biden's administration of a lower court's ruling that deemed unconstitutional the SEC's tribunal proceedings before administrative judges installed by the agency that can lead to financial penalties for infractions. The conservative justices focused on a part of the 2022 ruling by the New Orleans-based U.S. Court of Appeals for the Fifth Circuit that found that in-house proceedings violated the U.S. Constitution's Seventh Amendment right to a jury trial. Texas-based hedge fund manager George Jarkesy, whom the SEC fined and barred from the industry after determining he had committed securities fraud, challenged the legality of the agency's system. His lawsuit was supported by numerous conservative and business groups, which long have complained about the regulatory reach of the federal "administrative state" in areas such as energy, the environment, climate policy, workplace safety and financial regulation. The conservative justices expressed concern that SEC administrative proceedings are conducted for certain charges, such as fraud, without a jury, when similar cases alleging fraud in federal court would have one. "It does seem to me to be curious that - and unlike most constitutional rights - you have that right until the government decides that they don't want you to have it. That doesn't seem to me the way the Constitution normally works," Chief Justice John Roberts said.
