The Supreme Court has ruled that the Securities and Exchange Commission (SEC) cannot use its own internal trials to handle fraud cases. Instead, the SEC must take these cases to federal court, where defendants have the right to a jury trial.

This decision overturns the SEC's previous practice of resolving some securities fraud complaints through its own administrative proceedings. The court said this method is unconstitutional.

The ruling could impact how other government agencies operate. It reflects a trend where the current Supreme Court, influenced by conservative and business interests, has been limiting the powers of federal regulators.

The case was brought by a Houston hedge fund manager named George R. Jarkesy. He argued that the SEC was more likely to win cases in its own proceedings compared to federal court. Statistics show the SEC wins almost all cases in its own trials but only about 60% in federal court.

The 5th U.S. Circuit Court of Appeals previously agreed with Jarkesy. It said Congress gave the SEC too much power to decide where to try cases. The appeals court also criticized laws that protect SEC administrative judges from being fired by the president.

The Supreme Court's decision will force the SEC to change its enforcement strategy. It may also set a precedent for other regulatory agencies. The ruling is part of a broader effort by the current Supreme Court to restrict the powers of federal regulators.