Common Law Fraud and SEC v. Jarkesy: The Key Issue Underlying the Questions Presented

In SEC v. Jarkesy, the U.S. Supreme Court is poised to determine the constitutionality of the SEC’s practice of enforcing the securities laws through administrative proceedings. How the Court will answer that question is unclear, but whatever the Court decides will have far-reaching implications. Beyond the obvious repercussions for SEC proceedings and the administrative state generally, the case also offers the Court a chance to weigh in on another significant question: What are the contours of common law fraud? This guest article by MoloLamken attorneys Eric R. Nitz and Kenneth E. Notter III discusses the proceedings before the Court, how the Court appears likely to rule and the implications the Court’s decision may have on SEC enforcement efforts – and fraud actions generally – against private fund managers. See “Agency Power and Adjudication: The Government Seeks Supreme Court Review of Jarkesy v. SEC” (Jun. 21, 2023).

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