https://cei.org/blog/george-washington-george-jarkesy-and-the-administrative-states-lack-of-fundamental-justice/
The recent ruling by the U.S. Court of Appeals for the Fifth Circuit in Jarkesy v. SEC is a victory for limited constitutional government on many levels. As Mario Loyola, professor at Florida International University and senior fellow here at the Competitive Enterprise Institute, writes in The Wall Street Journal, the court “has taken what could be a historic step toward restoring the Constitution’s checks and balances.”
The case involved the Securities and Exchange Commission (SEC) seeking penalties for alleged fraud against hedge fund manager George Jarkesy. Utilizing a provision of the Dodd-Frank “financial reform” of 2010, the SEC chose to pursue Jarkesy in an internal proceeding before an administrative law judge (ALJ) rather than a normal federal court that is part of the judicial branch created by the Constitution’s Article III. As Loyola points out, in Jarkesy’s and other cases, the SEC “acts as rulemaker, prosecutor, and judge for America’s securities laws.”
On multiple grounds, the Fifth Circuit majority found the SEC’s denying Jarkesy the venue of a federal court in which to defend himself to be in violation of the Constitution. The court ruled that, because fraud has been a common-law offense to which jury trial right attaches, and the SEC in-house proceeding lacked a jury of his peers, Jarkesy was denied his Seventh Amendment guarantee of trial by jury.
