Next week’s argument in Liu v. Securities and Exchange Commission will take the justices through familiar ground, as they consider once again the boundaries of the broad and multifarious forms of relief available in litigation enforcing the Securities Act of 1933 and the Securities Exchange Act of 1934.
This particular case involves Section 21 of the Exchange Act, added in 2002, which includes “any equitable relief that may be appropriate or necessary” in the list of remedies available to the SEC (as opposed to private plaintiffs) in judicial (as opposed to administrative) proceedings. The specific question is whether that general reference to “equitable relief” includes the remedy of “disgorgement.” Generally speaking, disgorgement would entitle the SEC to recover from the defendant all of the defendant’s profits from the unlawful activity.
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