A Florida federal judge’s decision that transfer agent Island Stock Transfer Inc. must pay nearly $115,000 in disgorgement gives the SEC more legal ammunition to go after ill-gotten gains.
Congress last year expanded the Securities and Exchange Commission’s authority to pursue disgorgement even when victims of securities fraud won’t benefit from the payment—effectively overriding a US Supreme Court ruling that curtailed the SEC’s enforcement remedies, a district court judge found.
Aug. 10 decision may be the first to directly address the issue. While not binding on other district courts, the decision gives the SEC a ruling to highlight when arguing for disgorgement in cases where it’s hard to identify or prove that specific individuals were harmed, including in insider trading.
‘Enforcement 40’ for 2020
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