Document Type
Essay
Abstract
In SEC v. Jarkesy, the Supreme Court held that whenever the SEC seeks to impose monetary penalties on enforcement targets for securities fraud, it must proceed in federal court and not its own administrative forum. Many observers predict this will significantly impact SEC enforcement.
But not necessarily. A simple legal patch might repair the hole Jarkesy opened up: parties who register with the SEC may thereby consent to its administrative jurisdiction. (Because Jarkesy and the funds he managed were not registered, his case did not resolve the issue.)
This Essay shows how registration may constitute consent to SEC administrative adjudication. Drawing on Supreme Court precedent on consent to otherwise unconstitutional adjudications, I show how SEC registrants either already have consented to SEC administrative adjudication or could easily be deemed to have done so by issuing new interpretive guidance or amending a few regulatory forms.
If accepted, this constitutional consent argument would substantially insulate SEC enforcement from Jarkesy’s impact. I review all 1,481 actions the SEC brought in fiscal years 2021 and 2023 and find that only five percent of original enforcement actions involved administrative proceedings against unregistered parties for fraud-related misconduct seeking monetary penalties. Limiting Jarkesy to unregistered persons would allow SEC enforcement to proceed virtually unchanged.
Recommended Citation
Alexander I. Platt,
Registration as Consent: Patching Jarkesy's Hole in SEC Enforcement,
100
Notre Dame L. Rev. Reflection
85
(2025).
Available at:
https://scholarship.law.nd.edu/ndlr_online/vol100/iss2/2
