Supreme Court to Decide Fund Manager’s 10-Year SEC Fight — SEC Roundup

Welcome to SEC Roundup, a bimonthly video series by former Securities and Exchange Commission senior trial counsels Nick Morgan and Tom Zaccaro, founders of the nonprofit advocacy group Investor Choice Advocates Network.

The Supreme Court agreed on June 30 to review a case in which hedge fund principal George Jarkesy has been battling the SEC since it brought an administrative proceeding against him over 10 years ago.

Morgan and Zaccaro discuss the case and its broad potential impact with Jarkesy’s lawyers, solo practitoners Karen Cook and Mike McColloch.

Jarkesy contends, and a federal appellate court agrees, that the SEC’s administrative proceedings are unconstitutional and deny IAs and others their right to a jury.

“It’s a very broken system,” McColloch said.

The SEC sets up “these fake courts, I call them fake, inside the agency, administrative law judges … and they put on trials, just like a federal court would, except no right to trial by jury, the rules of evidence don’t apply, to the extent they ever do, they only apply in favor of the SEC and you lose 100% of the time,” McColloch said. “By and large it’s a kangaroo court.”

See the video above for the discussion with Cook and McColloch.