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.