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The SCOTUS Decision That Could Break Federal Agencies and Lead to ‘Low-Level Lawbreaking’

SEC v. Jarkesy could have massive implications for the federal government.

Visitors pose for photographs outside the U.S. Supreme Court.
Visitors pose for photographs outside the U.S. Supreme Court Tuesday, June 18, 2024, in Washington. ( AP Photo/Jose Luis Magana) Jose Luis Magana/AP

It may have seemed like a minor ruling, but the Supreme Court’s decision on Thursday — in a case about whether individuals can dispute civil penalties in a federal court rather than having an in-house legal proceeding — is likely to have massive ripple effects at federal agencies.

It could also have a big impact on taxpayers.

The case, SEC v. Jarkesy, dealt with a hedge fund manager, George Jarkesy, who was fined by the Securities and Exchange Commission for misleading investors. Jarkesy was ordered to pay a civil penalty of about $300,000.