Administrative law judges appointed by regulators are unfit to preside over securities fraud actions that seek penalties from defendants, which require a jury trial under the Constitution, a hedge fund manager said to the US Supreme Court.
Allowing the Securities and Exchange Commission to use administrative tribunals instead of giving defendants an opportunity to face fraud allegations in federal court is unconstitutional, respondent George Jarkesy argued in a brief filed Wednesday.
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The Dodd-Frank Act, which gave the SEC power to assign securities fraud claims to its own ...