The Scope Of SEC Defendants' Jury Trial Right: Part 4


This is the last of four articles examining the scope of the Seventh Amendment jury trial right as applied to the facts that set the maximum monetary penalty a judge may impose against a civil defendant in a U.S. Securities and Exchange Commission enforcement action. The previous articles explained why the Seventh Amendment entitles a civil defendant to a jury finding of those facts that increase the maximum penalty, how defining “each violation” that the jury must pass on could have a significant impact on the potential civil penalty that could be imposed, and why obtaining certain penalties requires the SEC to prove to the jury the causal connection between the violation and any gains or losses.[1] In this article, we address why, even with regard to otherwise negligence-based securities law violations, the SEC must prove scienter to the jury in order to obtain a second- or third-tier penalty.

Originally published in Law360 - July 25, 2016.

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