‘Enforcement 40’ for 2020
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Join the Securities Litigation and Enforcement Group on LinkedInHow the SEC Became a SCOTUS Frequent Flyer | On SECond Thought…
The Liu case marks four consecutive years in which the SEC has faced a major Supreme Court challenge to its enforcement practices. It comes on the heels of the aforementioned Kokesh case in 2017, Lucia v. SEC in 2018, and Lorenzo v. SEC in 2019, continuing what appears to be the longest streak of its kind […]
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 […]
Can the S.E.C. Force Repayment of Ill-Gotten Gains? – The New York Times
The issue before the Supreme Court will be whether a District Court can order a defendant to repay money obtained by fraud or trading on confidential information, or whether it is a penalty beyond the “equitable” power of the courts to require. The S.E.C. is sure to argue that a defendant who engages in fraud […]
Supreme Court to Hear Case on Validity of SEC Disgorgement | Ropes & Gray LLP – JDSupra
The outcome in Liu could seriously undercut the SEC’s enforcement power by taking away one of its most powerful tools, and by encouraging defendants to continue to challenge the SEC’s remedial authority in other contexts, such as suspensions and bars. Additionally, Liu could call into question the power of other regulatory agencies to seek disgorgement. […]
Remedies in SEC Enforcement Actions: The End of Disgorgement? – SEC ACTIONS
The Supreme Court granted certiorari in a case that may well have a very significant impact on the remedies available in Commission enforcement actions: Liu v. Securities and Exchange Commission, No. 18-1501 (Cert. granted Nov. 1, 2019). The question the Court agreed to resolve is: “Whether the Securities and Exchange Commission may seek and obtain […]
Supreme Court will consider stripping SEC of power to seize illegal profits – Los Angeles Times
The U.S. Supreme Court agreed to consider stripping the Securities and Exchange Commission of its power to recoup illegal profits from wrongdoers, taking up a challenge to one of the agency’s most potent legal weapons. The appeal by Charles Liu and Xin Wang contends that “disgorgement” isn’t one of the remedies Congress has authorized the […]
Taking Insider Trading Too Far: What’s Left of the ‘Personal Benefit’ Requirement After ‘U.S. v. Martoma’? | New York Law Journal
When the Supreme Court declined to hear Martoma’s appeal last month, it missed an opportunity to clarify the law going forward in the Second Circuit. In a world where corporate insiders can share information outside the company for many legitimate reasons, those insiders—and the recipients of information from them—risk unfair prosecution absent a narrow, objectively defined […]
Supreme Court rejects insider trading appeal brought by SAC’s Martoma – Reuters
The U.S. Supreme Court on Monday rejected an appeal by Mathew Martoma, a former portfolio manager for billionaire Steven A. Cohen, challenging a conviction for insider trading. The Supreme Court left in place a June 2018 ruling by the New York-based 2nd U.S. Circuit Court of Appeals, which found there was enough evidence to establish […]
The Supreme Court Hands the S.E.C. a Rare Win – The New York Times
The Securities and Exchange Commission’s record in the Supreme Court has not been strong the past few years. The court limited the period during which the agency can pursue a fraud claim and required a case seeking disgorgement be filed within five years of the violation. But the justices handed the S.E.C. a significant victory […]
Supreme Court backs SEC, rules against investment banker
The U.S. Supreme Court reinforced the Securities and Exchange Commission’s powers, upholding sanctions against an investment banker found to have duped investors about a startup company’s financial condition. The justices, voting 6-2, said Francis V. Lorenzo, who worked at Charles Vista, could be held liable for taking part in a scheme to defraud investors even […]