The Fifth Circuit denied the SEC’s en banc petition on October 21, 2022, leaving a certiorari petition as the only remaining avenue for the SEC to challenge a decision that threatens several important aspects of its enforcement powers. As the judges dissenting from denial of en banc review recognized, the decision “raises questions of exceptional importance.” If left standing, Jarkesy potentially could cripple the ability of the Commission to hold gatekeepers and supervisors responsible for negligent oversight of those who commit fraud, opens the door to constitutional challenges to some SEC actions filed in federal court, and raises questions about the appropriateness of administrative settlements that the SEC continues to ink every day.
Source: Fifth Circuit Declines to Rehear Sweeping Decision That Hamstrings SEC’s Enforcement Program
