In June 1971, the Securities and Exchange Commission (P) initiated a disciplinary proceeding against D pursuant to §9(b) of the Investment Company Act of 1940 and §203(f) of the Investment Advisers Act of 1940. P alleged that D had violated numerous provisions of the federal securities laws in his management of several mutual funds registered under the Investment Company Act. After an evidentiary hearing before an Administrative Law Judge and review by P in which the preponderance-of-the-evidence standard was employed, P held that D had violated antifraud, reporting, conflict of interest, and proxy provisions of the federal securities laws. D was permanently barred from associating with any investment adviser or affiliating with any registered investment company and suspending for one year from associating with any broker or dealer in securities. D appealed in part challenging P's use of the preponderance-of-the-evidence standard of proof in determining whether he had violated antifraud provisions of the securities laws. D contends that P was required to weigh the evidence against a clear-and-convincing standard of proof. The court of appeals disagreed. The Supreme Court granted certiorari.