A federal appeals court has upheld the Securities and Exchange Commission’s (SEC) power to resolve fraud cases in internal administrative proceedings instead of bringing charges in federal court.

The U.S. Court of Appeals for the District of Columbia Circuit on Tuesday threw out a challenge from Houston-based hedge fund manager George Jarkesy, who argued that the SEC’s internal process infringed on his constitutional rights.

The agency accused Jarkesy of defrauding investors.

The appeals court said Congress gave the SEC a choice to handle fraud claims internally or in courts when it passed a 2010 law overhauling financial regulations.

The ruling upheld a lower court decision.

In response to complaints, the agency last week proposed rules to give defendants greater access to evidence and more time to prepare for in-house proceedings.