The U.S. Supreme Court's recent 6‑3 ruling in
SEC v. Jarkesy eliminated the SEC's ability to use
contested administrative proceedings to seek civil monetary
penalties for anti-fraud violations of the securities laws.
However, Jarkesy is only one of several landmark rulings
handed down by the U.S. Supreme Court this term. Most notably, the
Court's ruling in Loper Bright Enterprises v. Raimondo
overturned the principle that federal courts must defer to an
agency's interpretation of a statute if it is silent or
ambiguous, known as Chevron deference. When considered
together, Jarkesy and Loper Bright could
dramatically reshape the path forward for private fund managers
facing an aggressive SEC rulemaking and enforcement agenda. In
fact, some could argue that the Court is all but inviting
challenges to SEC rulemaking and other administrative actions in
federal courts, which could chip away at the administrative state.
At minimum, the private funds industry now faces a far more level
playing field, with new tools to challenge the SEC's authority
or, at the very least, to leverage when attempting to settle
actions on more favorable terms. In a guest article, Arnold &
Porter partners Veronica E. Callahan, Daniel M. Hawke and Christian
D.H. Schultz examine the repercussions of the recent Supreme Court
rulings by summarizing the procedural history of Jarkesy;
offering an overview of the decision; and analyzing what
Jarkesy, Loper Bright and other recent legal
decisions mean for the private funds industry going forward. See
"Forecasting Potential Outcomes in SEC v.
Jarkesy Based on Recent Oral Arguments" (Feb. 22,
2024).
To view the full article, click here.
Originally published by Private Equity Law Report
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