Document ID: ./input/supremecourt_opinions/opinions/23pdf/22-859new_kjfm.pdf
Page Number: 34.0

2 

SEC v. JARKESY 

GORSUCH, J., concurring 

charges against Mr. Jarkesy.  The charges were serious; the 
agency accused him of defrauding investors.  The relief the 
agency sought was serious, too:  millions of dollars in civil 
penalties.  See SEC, Division of Enforcement’s Post-Hear-
ing  Memorandum  of  Law  in  In re  John  Thomas  Capital 
Management Group, LLC, Admin. Proc. File No. 3–15255, 
pp. 28–29 (SEC, Apr. 7, 2014).  For most of the SEC’s 90-
year existence, the Commission had to go to federal court to 
secure that kind of relief against someone like Mr. Jarkesy. 
Ante, at 3–4.  Proceeding that way in this case hardly would 
have promised him an easy ride.  But it would have at least 
guaranteed Mr. Jarkesy a jury, an independent judge, and 
traditional  procedures  designed  to  ensure  that  anyone
caught up in our judicial system receives due process. 

In 2010, however, all that changed.  With the passage of
the Dodd Frank Act, Congress gave the SEC an alternative
to court proceedings.  Now, the agency could funnel cases 
like  Mr.  Jarkesy’s  through  its own  “adjudicatory”  system. 
See 124 Stat. 1376, 1862–1865.  That is the route the SEC 
chose when it filed charges against Mr. Jarkesy. 

There is little mystery why.  The new law gave the SEC’s
Commissioners—the same officials who authorized the suit 
against  Mr.  Jarkesy—the  power  to  preside  over  his  case 
themselves and issue judgment.  To be sure, the Commis-
sioners opted, as they often do, to send Mr. Jarkesy’s case 
in the first instance to an “administrative law judge” (ALJ).
See 17 CFR §201.110 (2023).  But the title “judge” in this
context is not quite what it might seem.  Yes, ALJs enjoy 
some  measure  of  independence  as  a  matter  of  regulation 
and statute from the lawyers who pursue charges on behalf 
of the agency.  But they remain servants of the same mas-
ter—the  very  agency  tasked  with  prosecuting  individuals 
like  Mr.  Jarkesy.    This  close  relationship,  as  others  have
long recognized, can make it “extremely difficult, if not im-
possible, for th[e ALJ] to convey the image of being an im-
partial  fact  finder.”  B.  Segal,  The  Administrative  Law