This is the last of four articles examining the scope of the Seventh Amendment jury trial right as applied to the facts that set the maximum monetary penalty a judge may impose against a civil defendant in a U.S. Securities and Exchange Commission enforcement action. The previous articles explained why the Seventh Amendment entitles a civil defendant to a jury finding of those facts that increase the maximum penalty, how defining "each violation" that the jury must pass on could have a significant impact on the potential civil penalty that could be imposed, and why obtaining certain penalties requires the SEC to prove to the jury the causal connection between the violation and any gains or losses.[1] In this article, we address why, even with regard to otherwise negligence-based securities law violations, the SEC must prove scienter to the jury in order to obtain a second- or third-tier penalty.

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Originally published by Law360, New York, July 25, 2016.

Footnote

[1] For a more thorough explanation, see Matthew T. Martens, Jaclyn N. Moyer and Derek A. Woodman, The Scope of SEC Defendants' Jury Trial Right: Part 1, Law360 (July 1, 2016), https://www.law360.com/articles/809309/the-scope-ofsec-defendants-jury-trial-right-part-1; Matthew T. Martens, Jaclyn N. Moyer and Derek A. Woodman, The Scope of SEC Defendants' Jury Trial Right: Part 2, Law360 (July 11, 2016), https://www.law360.com/articles/815542/the-scope-of-secdefendants-jury-trial-right-part-2; and Matthew T. Martens, Jaclyn N. Moyer and Derek A. Woodman, The Scope of SEC Defendants' Jury Trial Right: Part 3, Law360 (July 18, 2016), http://www.law360.com/articles/818648/the-scope-of-secdefendants-jury-trial-right-part-3. A more comprehensive analysis of these issues can be found at Matthew T. Martens & Troy A. Paredes, The Scope of the Jury Trial Right in SEC Enforcement Actions, 71 N.Y.U. Ann. Surv. Am. L. 147 (2016).

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