In June 2024, the Supreme Court ruled that the SEC’s use of administrative proceedings to impose penalties violates the 7th Amendment. This ruling could reshape regulatory enforcement across industries.
Key Takeaways
The SEC and PCAOB may become more selective in enforcement.
CPA firms may re-enter the public audit space due to lighter regulatory pressure.
IPO costs could decline, and more venture-backed firms may pursue public offerings.
Dual-track exits (IPO + M&A) may become more common.
Potential Benefits
Audit Competition: Increased participation could drive audit costs down for small and mid-cap companies.
Reduced Rulemaking: We may see fewer new regulations and even some rollbacks.
IPO Revival: The decreased burden could reenergize the IPO market.
Risks and Unknowns
Reduced Oversight: Investors may face greater risks due to looser regulation.
PCAOB Impact: It remains unclear how the decision will affect enforcement in public company auditing.
In short, the Jarkesy decision could mark a major shift in the regulatory landscape—one with implications for audits, capital markets, and exit strategies in 2025 and beyond.
