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 (2017), the court held that SEC disgorgement is a “penalty” subject to the securities laws’ five-year statute of limitations for penalties. 5 U.S.C. §2462. Now, the court has agreed to hear an appeal from the Ninth Circuit presenting the question whether the SEC may seek disgorgement at all in federal court. See SEC v. Liu, 754 Fed.Appx. 505 (9th Cir. 2018), cert. granted Nov. 1, 2019.
‘Enforcement 40’ for 2020
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