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‘Enforcement 40’ for 2020
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Join the Securities Litigation and Enforcement Group on LinkedInFlorida District Court Permits the SEC to Pay Disgorgement to the US Treasury Where Victims of the Fraud Could not be Identified | Winstead
Recently, in SEC v. Spartan Securities Group, Ltd, et al., a Florida federal court held that the Securities and Exchange Commission (“SEC”) could seek disgorgement and direct funds to the Treasury because the defrauded victims could not be identified. *** This question was important because some cases do not lend themselves to victim compensation. For […]
SEC Disgorgement Win Bolsters Ability to Recoup Ill-Gotten Gains
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 […]
How the SEC Became the Investor’s Collection Agent | LinkedIn
The Securities and Exchange Commission has long described itself as “the investor’s advocate,” a motto coined in the late 1930s by William O. Douglas, the agency’s third chairman (and later a Supreme Court Justice). A more appropriate moniker for today’s SEC might be “the investor’s collection agent.”Belatedly slipped into this year’s1480-page, must-pass defense appropriations bill – […]
What Just Happened to SEC Insider Trading Disgorgement? | LinkedIn
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 […]
What About All Those Tainted SEC Disgorgement Awards? | LinkedIn
The Liu decision also planted a big, leafy money tree for securities lawyers by expressly declining to answer a number of related questions and sending them all back down to the lower courts to figure out over the course of many more years of litigation. Oddly enough, however, the Court didn’t mention perhaps the thorniest unanswered […]
The SEC Loses an Arrow from Its Quiver in Liu v. SEC | Arnall Golden Gregory LLP – JDSupra
On June 22, 2020, the U.S. Supreme Court published its decision in Liu v. Securities and Exchange Commission, confirming the SEC’s authority to seek disgorgement from federal courts in enforcement actions. This was an important question that the Court raised but did not answer in 2017. The confirmation, however, comes with limitations not previously imposed […]
Liu v. SEC Highlights Limits of SEC Disgorgement Power
Three years ago, the Supreme Court ruled in Kokesh v. SEC that disgorgement in the context of an SEC enforcement action functions as a “penalty” for purposes of 28 U.S.C. § 2462 and is therefore subject to a five-year statute of limitations. 581 U.S. ___ (2017). In practice, the effect of Kokesh for companies and individuals under investigation by […]
US: SCOTUS Appears Willing to Let SEC Disgorgement Stand
On March 3, 2020, the US Supreme Court heard oral argument on whether the SEC has the authority to obtain disgorgement of “ill-gotten gains” in federal court for securities law violations. During the oral argument, in their questioning, the Justices frequently referred back to district courts’ inherent authority to enter equitable relief. Based on this […]
SCOTUS Oral Argument Suggests SEC Disgorgement Will Survive—But Might Be Limited To Victim Compensation | Seyfarth Shaw LLP – JDSupra
Seyfarth Synopsis: On Tuesday, March 3, 2020, the Supreme Court heard oral arguments in Liu et al v. Securities and Exchange Commission, in what some thought would be a landmark case on the SEC’s power to seek disgorgement from a court for violations of securities laws.[1] In questioning both parties, the Justices did not seem […]
The SEC May Lose Again in the Supreme Court in ‘Liu v. SEC’ | The Recorder
In the end, although the oral argument will be telling, the Supreme Court seems unlikely to conclude that the SEC can continue to obtain disgorgement, in its current form, when the SEC sues a defendant in court. It is theoretically possible that the Court could cut the disgorgement remedy back without eliminating it entirely—for instance, […]