In the case of Steadman v. Securities and Exchange Commission (SEC), 1980, the U.S. Supreme Court upheld a ruling by the SEC that Charles R. Steadman had violated federal securities laws through his mutual fund operations. The court rejected Steadman's argument that he should not be held liable because he did not act with "scienter" - an intent or knowledge of wrongdoing - which is required for criminal liability under these laws but not civil liability. The court also affirmed that preponderance of evidence, rather than clear and convincing evidence, was sufficient to prove violations in administrative proceedings before the SEC.

The dissenting opinion in the case of Steadman v. Securities and Exchange Commission argued that the majority's decision to uphold the SEC's use of a preponderance-of-the-evidence standard, rather than clear-and-convincing evidence, was incorrect. The dissenters believed this lower standard could lead to unjust results for defendants accused of fraudulent conduct under federal securities laws. They contended that due process required a higher burden of proof given the severe civil penalties and reputational harm associated with such accusations. Furthermore, they pointed out inconsistencies between this ruling and other cases where courts had applied stricter standards even when lesser interests were at stake.