The U.S. Court of Appeals for the Fifth Circuit (Court or Fifth Circuit) recently decided Jarkesy v. SEC. The Court’s decision has deep ramifications for the SEC that build off of other recent decisions reasserting constitutional limitations on the SEC’s authority. Specifically, the Fifth Circuit declared that SEC enforcement proceedings before an administrative law judge (ALJ) violate the Seventh Amendment’s jury-trial guarantee, that Congress unconstitutionally delegated legislative authority to the SEC when it authorized the SEC to pursue administrative enforcement proceedings and that statutory restrictions on the removal of SEC ALJs violated the Constitution. The ruling in Jarkesy is significant – it could reshape the SEC’s enforcement priorities and opens the door to a number of additional strategic considerations for defendants targeted by the SEC. In a guest article, MoloLamken attorneys Eric R. Nitz and Allison Mileo Gorsuch summarize the case, identify the key takeaways for fund managers and forecast the decision’s impact on future SEC enforcement efforts against fund managers. For more on Jarkesy, see “Fifth Circuit Decision Could Hamstring SEC Enforcement Abilities” (Jun. 9, 2022). See also our two-part series “Present and Former SEC Officials Discuss Enforcement”: Part One (Jun. 2, 2022); and Part Two (Jun. 9, 2022).