The SEC often names relief defendants in cases where some person has obtained money through unlawful conduct, and then provides that money to other persons or entities, who were not themselves involved in the illegal activity. Naming the person in possession of the unlawful proceeds enables the SEC to lay legal claim to those funds.
But that is not the case here: The money Mr. Mickelson was forced to give up was the proceeds of his own trades. And based on the current state of the law—along with the fact that the SEC declined to charge Mr. Mickelson—it appears that those trades were not legally actionable. If so, it is hard to see a lawful basis for the disgorgement order.
via Phil Mickelson and the SEC’s Legal Bogey – WSJ.
