The Supreme Court ruled against the Securities and Exchange Commission’s administrative law adjudication system on June 27, 2024, significantly changing how financial fraud is policed. Historically, administrative law proceedings allowed the SEC to enforce securities regulations efficiently without requiring court trials. However, the Supreme Court found that this system infringed upon the constitutional right to a jury trial.
The decision extends beyond financial fraud regulation and weakens the administrative state, affecting federal and state regulators across many professions in addition to advisors—including accountants, contractors, worker safety inspectors, doctors, and lawyers.
In this course, Jeffrey Plotkin, J.D., a former SEC enforcement official, explores the immediate and long-term ramifications of this landmark ruling, particularly for Investment Adviser Representatives (IARs) and Registered Investment Advisers (RIAs). Attendees gain insight into the regulatory shifts that are likely to occur and how these changes impact their professional obligations.
Topics You Learn About
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The Court ruled the SEC cannot impose civil penalties in-house. Fraud cases must now be tried in federal courts with juries.
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Seventh Amendment guarantees jury trials in common law cases. The ruling affirms a constitutional right to a jury trial. Civil penalties must now be pursued through the judicial system.
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Administrative state faces growing legal challenges. The ruling aligns with efforts to limit agency enforcement power. Future cases may further erode federal agencies’ regulatory authority.
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SEC must shift enforcement strategy. The agency now brings fraud cases directly to federal courts. This increases costs, delays, and resource burdens for enforcement.
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State regulators may face similar challenges. The ruling could inspire litigation against state-level enforcement. Professionals may challenge fines imposed without a jury trial.
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Disgorgement penalties could be the next legal battleground. Some Justices suggest jury trials may be required for disgorgement. Future rulings could further restrict SEC enforcement tools.
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Defense attorneys gain leverage against the SEC. Jury trials make it harder for SEC to win enforcement cases. This may lead to more settlements or reduced penalties.
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The ruling does not eliminate SEC oversight. The SEC still enforces compliance through exams and investigations. Investment advisors must continue meeting fiduciary obligations.
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Impacts extend beyond financial professionals. Other industries regulated by administrative agencies may see changes. Professions like doctors and contractors could challenge fines.
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Supreme Court’s shift may continue reshaping regulation. The ruling signals a broader effort to dismantle agency power. Future decisions could further limit administrative enforcement authority.
Instructor Bio: Jeffrey Plotkin, J.D.
Jeffrey Plotkin, J.D., is a seasoned legal professional specializing in securities law and financial regulation. With decades of experience in advising financial institutions, his expertise provides a comprehensive perspective on regulatory challenges and compliance strategies in the post-ruling environment.
Who Should Attend:
IA Reps, CFPs, EAs, CFAs, CPA financial planners, CPA/PFSs, CIMAs, CLUs, ChFCs, and other professionals who seek a deeper understanding of diversified portfolio strategies.
Cost:
Free to Advisors4Advisors members ($60/Qtr.)
Prerequisites: None
Advanced Preparation: None
Course Level: Update
Course Delivery Method: Live internet, and on-demand webinar replay
Field of study: Regulatory ethics
Advisors4Advisors is approved as a CE provider by:
- CFP Board, which regulates CE for Certified Financial Planners.
- North American Securities Administrators Association. NASAA does not endorse any particular provider of CE courses. The content of the course and any views expressed are those of the instructor and do not necessarily reflect the views of NASAA or any of its member jurisdictions. The class is submitted for approval NASAA.
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- Investments & Wealth Institute, enabling credit for CFP®, CIMA®, and CPWA® professionals.
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