All’s Fair in Crime and Disgorgement: Supreme Court Upholds SEC’s Authority to Disgorge Ill-Gotten Gains with Limitations

By Mary P. Hansen and Nicolette J. Zulli

On June 22, 2020, the Supreme Court, in an 8 to 1 decision, held in Liu v. SEC that the U.S. Securities and Exchange Commission (“SEC” or “Commission”) may seek “disgorgement” in federal court actions in amounts which do not exceed a wrongdoers’ net profits and are, if possible, ultimately returned to victims pursuant 15 U.S.C. § 78u(d)(5), which authorizes the SEC to seek “equitable” relief.[1] Continue reading “All’s Fair in Crime and Disgorgement: Supreme Court Upholds SEC’s Authority to Disgorge Ill-Gotten Gains with Limitations”

Time is Running Out for the SEC: The Circuit Split on Limiting SEC Disgorgement to a Five-Year Statute of Limitations Signals an Impending Major Change

By Mauro M. Wolfe and Jovy Dedaj

Under the new Administration, we have been promised a new tone regarding how Government interfaces with the market.  This “change” is of particular interest to those who defend matters before the SEC.  Will we see a change from “broken windows” enforcement where everything matters to a more traditional, and possibly, more friendly regulatory environment?  Winding its way through the courts is an SEC life-altering moment: does the SEC concede that there is a five-year statute of limitations on enforcement cases including disgorgement?  As far as penalties and fines are concerned, the Supreme Court has already ruled on that issue and said it does.  The SEC lost that one.  The question remaining is whether the Supreme Court will apply the same limitation to disgorgement and how the new SEC leadership will respond.  The short answer is that such a limitation should apply.  Continue reading “Time is Running Out for the SEC: The Circuit Split on Limiting SEC Disgorgement to a Five-Year Statute of Limitations Signals an Impending Major Change”