The Fifth Circuit Court of Appeals ruling in Jarkesy v. Securities and Exchange Comm'n is a potential blockbuster. In 2020, the Securities and Exchange Commission (SEC) held that George Jarkesy had engaged in misrepresentation in certain public statements, thereby committing securities fraud. The SEC ordered Jarkesy to cease and desist and to pay a civil penalty. In addition, the agency barred him from certain securities industry activities.

Jarkesy petitioned for review of the SEC's decision. In that petition, he did not challenge the agency's substantive decisions. Instead, he argued that the decision was unconstitutional for three reasons: Jarkesy had a right to a trial by jury, rather than an administrative decision; the decision flowed from an improper delegation of legislative authority to the SEC; and because the administrative law judge (ALJ) who rendered the initial decision was unconstitutionally protected from removal except for cause.

The Fifth Circuit agreed with Jarkesy on each point. This is perhaps not a surprise when the majority opinion favorably cites former President Ronald Reagan's "Nine Most Terrifying Words in the English Language": I'm from the government, and I'm here to help. The court's opinion was written by Judge Jennifer Walker Elrod, a George W. Bush …