Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

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SECURITIES AND EXCHANGE COMMISSION v. JARKESY ET AL. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 22–859. Argued November 29, 2023—Decided June 27, 2024 In the aftermath of the Wall Street Crash of 1929, Congress passed a suite of laws designed to combat securities fraud and increase market transparency. Three such statutes are relevant: The Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advis- ers Act of 1940. These Acts respectively govern the registration of se- curities, the trading of securities, and the activities of investment ad- visers. Although each regulates different aspects of the securities markets, their pertinent provisions—collectively referred to by regula- tors as “the antifraud provisions,” App. to Pet. for Cert. 73a, 202a— target the same basic behavior: misrepresenting or concealing mate- rial facts. To enforce these Acts, Congress created the Securities and Exchange Commission. The SEC may bring an enforcement action in one of two forums. It can file suit in federal court, or it can adjudicate the matter itself. The forum the SEC selects dictates certain aspects of the litiga- tion. In federal court, a jury finds the facts, an Article III judge pre- sides, and the Federal Rules of Evidence and the ordinary rules of dis- covery govern the litigation. But when the SEC adjudicates the matter in-house, there are no juries. The Commission presides while its Divi- sion of Enforcement prosecutes the case. The Commission or its dele- gee—typically an Administrative Law Judge—also finds facts and de- cides discovery disputes, and the SEC’s Rules of Practice govern. One remedy for securities violations is civil penalties. Originally, the SEC could only obtain civil penalties from unregistered investment advisers in federal court. Then, in 2010, Congress passed the Dodd- Frank Wall Street Reform and Consumer Protection Act. The Act au- thorized the SEC to impose such penalties through its own in-house 2 SEC v. JARKESY

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proceedings. Shortly after passage of the Dodd-Frank Act, the SEC initiated an enforcement action for civil penalties against investment adviser George Jarkesy, Jr., and his firm, Patriot28, LLC for alleged violations of the “antifraud provisions” contained in the federal securities laws. The SEC opted to adjudicate the matter in-house. As relevant, the final order determined that Jarkesy and Patriot28 had committed se- curities violations and levied a civil penalty of $300,000. Jarkesy and Patriot28 petitioned for judicial review. The Fifth Circuit vacated the order on the ground that adjudicating the matter in-house violated the defendants’ Seventh Amendment right to a jury trial. Held: When the SEC seeks civil penalties against a defendant for securi- ties fraud, the Seventh Amendment entitles the defendant to a jury trial. Pp. 6–27. (a) The question presented by this case—whether the Seventh Amendment entitles a defendant to a jury trial when the SEC seeks civil penalties for securities fraud—is straightforward. Following the analysis set forth in Granfinanciera, S. A. v. Nordberg, 492 U. S. 33, and Tull v. United States, 481 U. S. 412, this action implicates the Sev- enth Amendm