Market trust at stake: What the Supreme Court’s ruling in SEC v. Jarkesy means for investors

(The Conversation is an independent and nonprofit source of news, analysis and commentary from academic experts.)

D. Brian Blank, Mississippi State University and Brandy Hadley, Appalachian State University

(THE CONVERSATION) A recent Supreme Court ruling has gotten a lot of attention for how it could reshape government. What’s gotten much less attention is how it could affect markets.

As financeprofessors, we find this at least as important. The Supreme Court’s 6-3 ruling in SEC v. Jarkesy could make it more challenging for the Securities and Exchange Commission – the U.S. agency that regulates securities markets – to fight fraud. And any time the SEC loses power, as it just did, market trust and transparency may be at risk.

What matters for investors, including anyone with a 401(k) plan, is how the SEC chooses to handle cases moving forward.

What is securities fraud, anyway?

Securities are investments like stocks and bonds, and securities fraud is a crime that involves misleading...