‘Enforcement 40′ for 2017
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Dismantling the SEC’s Federal Court Disgorgement Authority | New York Law Journal
This term, the Supreme Court will consider whether a federal court can order disgorgement in an enforcement action brought by the Securities and Exchange Commission. Liu v. SEC, No. 18-1501. Under a disgorgement order, defendants are required to turn over gains derived from violating the federal securities laws. In Kokesh v. SEC, 137 S.Ct. 1635 […]
Can the S.E.C. Force Repayment of Ill-Gotten Gains? – The New York Times
The issue before the Supreme Court will be whether a District Court can order a defendant to repay money obtained by fraud or trading on confidential information, or whether it is a penalty beyond the “equitable” power of the courts to require. The S.E.C. is sure to argue that a defendant who engages in fraud […]
Supreme Court to Decide Whether the SEC Has the Authority to Seek Disgorgement in Enforcement Proceedings | Publications and Presentations | Arnold & Porter
On November 1, 2019, the Supreme Court granted certiorari in Liu v. Securities and Exchange Commission (18-1501). Liu seeks review of the US Securities and Exchange Commission’s (SEC) authority to pursue disgorgement as a form of equitable relief for federal securities law violations in district court proceedings, an issue cast into doubt by the Supreme […]
Remedies in SEC Enforcement Actions: The End of Disgorgement? – SEC ACTIONS
The Supreme Court granted certiorari in a case that may well have a very significant impact on the remedies available in Commission enforcement actions: Liu v. Securities and Exchange Commission, No. 18-1501 (Cert. granted Nov. 1, 2019). The question the Court agreed to resolve is: “Whether the Securities and Exchange Commission may seek and obtain […]
Supreme Court will consider stripping SEC of power to seize illegal profits – Los Angeles Times
The U.S. Supreme Court agreed to consider stripping the Securities and Exchange Commission of its power to recoup illegal profits from wrongdoers, taking up a challenge to one of the agency’s most potent legal weapons. The appeal by Charles Liu and Xin Wang contends that “disgorgement” isn’t one of the remedies Congress has authorized the […]
The Catch with Kokesh: Insurers Refusing to Cover Disgorgement to SEC – King & Spalding
While the J.P. Morgan decision will not be the final word on the insurability of disgorgement, the policy language at issue is commonplace and insurers certainly will cite the case to support denials of coverage. Additionally, courts in a number of states have held that fines and penalties are not insurable as a matter of […]
The SEC’s Greed Is Coming Back to Bite It – Bloomberg
Anyway some lawyers read the Kokesh opinion in that particular way and brought this class-action lawsuit against the SEC a couple of weeks ago. Delightfully the class of victims/plaintiffs in the lawsuit is securities fraudsters: Specifically, it’s “all persons or entities from whom the SEC has collected, during the period from October 26, 2011 to the present, purported ‘disgorgement,’” […]
In the Wake of Kokesh v. SEC: Whither Disgorgement in FCPA Cases – Lexology
On June 5, 2017, the United States Supreme Court unanimously held in Kokesh v. Securities and Exchange Commission [1] that disgorgement in SEC enforcement actions operates as a penalty, and as a result is subject to the federal five-year statute of limitations under 28 U.S.C. §2462. The Kokesh decision resolved a split between the US […]
The SEC Reaching Back Far In The Past With Its Powers of Disgorgement | Compliance Building
We have become used to the Securities and Exchange Commission extracting disgorgement of ill-gotten gains from those violating the securities laws. However, the enabling laws do not explicitly grant the SEC the right to disgorgement. We seem to accept that power, but how far back can the SEC go to grab cash from defendants? In […]
Eleventh Circuit ties SEC disgorgement to five-year statute of limitations – The FCPA Blog
Last month the United States Court of Appeals for the Eleventh Circuit held in SEC. v. Graham et al that the five-year statute of limitations in 28 USC §2462 applies to SEC claims for disgorgement or declaratory relief. Although Graham is not binding outside of the Eleventh Circuit, it represents a significant challenge to the […]