Graduation Year

2026

Date of Submission

11-2025

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Eric Helland

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Terms of Use for work posted in Scholarship@Claremont.

Abstract

This research paper constructs a comprehensive dataset of all 14,590 SEC administrative proceedings and litigation releases between January 2012 and October 2025. I examine two major Supreme Court rulings, Lucia v. SEC (2018) and SEC v. Jarkesy (2024), which imposed restrictions on the use of Administrative Law Judges (ALJs) due to their perceived bias and changed the SEC’s enforcement strategy. Using ordinary least squares, linear probability models, and difference-in-difference models, I test whether each ruling affected the SEC’s enforcement volume, forum choice, violation composition, case complexity, and monetary penalty magnitudes. After the Lucia ruling in June 2018, the enforcement patterns show a modest decline of 14 ALJ-filed cases per month, but no other significant changes. After the Jarkesy ruling in June 2024, the SEC shifted certain violation categories, specifically criminal/statutory and market manipulation cases, out of the administrative forum and into the federal forum. Otherwise, the SEC has maintained stable enforcement volume, forum choice, case complexity, and the magnitude of monetary penalties. Overall, these findings suggest that while the Supreme Court decisions created new constraints on the use of ALJs, the SEC was able to adapt institutionally by reallocating cases across forums to maintain its overall enforcement strategy and levels. Legal scholarship hypothesized that the imposed ALJ constraints could trigger a decline in administrative enforcement and force the SEC to take on fewer, more complex cases through federal court. The results of this paper suggest the opposite: the SEC preserved its enforcement capacity by selectively reallocating violations across forums.

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