The SEC’s problem in insider trading cases is that there are rarely any easily identifiable investor victims (especially in so-called “misappropriation” cases, where the putative victim is nearly always a company or individual who didn’t trade or lose any money). In any event, it is rarely cost-effective to try to find them all and distribute relatively small sums to each of them, so the agency rarely even tries to do it.
So what’s the SEC’s answer? As many of us predicted after the Liu decision, the Commission has apparently decided to abandon disgorgement in most insider trading cases and simply demand higher civil penalties – if you’ll pardon the pun, in “Liu” of disgorgement.
‘Enforcement 40’ for 2020
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