Supreme Court of the United States
Steadman v. Securities and Exchange Commission
February 25, 1981450 U.S. 91
Summary
The Court held that the Securities and Exchange Commission may impose disciplinary sanctions in securities-law adjudications when violations are proved by a preponderance of the evidence, rather than by clear and convincing evidence. It concluded that the Administrative Procedure Act, read in light of its text and legislative history, establishes that standard for covered agency adjudications, and that Congress's choice must be respected absent constitutional constraints. Justice Powell, joined by Justice Stewart, dissented, reasoning that fraud-related sanctions carrying severe stigma and professional consequences should require clear and convincing evidence.
Holding
- Standard of proof in Commission disciplinary proceedings. The preponderance-of-the-evidence standard governs Commission disciplinary proceedings conducted under the relevant securities statutes and the Administrative Procedure Act; clear and convincing evidence is not required.
Docket 79-1266