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‘Enforcement 40’ for 2020
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Join the Securities Litigation and Enforcement Group on LinkedInU.S. Supreme Court rejects Musk-backed challenge to SEC’s ‘gag’ rule | Reuters
The U.S. Supreme Court on Tuesday rejected a challenge brought by a former Xerox Corp executive and backed by Elon Musk to a Securities and Exchange Commission (SEC) rule requiring people who agree to settlements with the agency not to deny its allegations against them. The justices declined to hear former Xerox chief financial officer […]
U.S. Supreme Court to hear SEC bid to avoid challenge to in-house judges | Reuters
The U.S. Supreme Court on Monday agreed to hear the Securities and Exchange Commission’s bid to block a challenge to the constitutionality of its in-house tribunal brought by a Texas accountant who the agency punished after faulting her audits of publicly traded companies. The justices took up the SEC’s appeal of a lower court ruling […]
SEC Gag Orders are Against Public Policy
Summary of the Argument The SEC’s prohibition against settling defendants criticizing the SEC’s unproven allegations raises important First Amendment and Due Process Clause issues, as noted by the Petitioner. Amici raise a complementary consideration warranting review: there is no compelling public policy reason to enforce SEC “gag orders” against defendants who settle with the SEC. […]
U.S. Supreme Court Agrees to Take Up Securities Suit Class Certification Issues | The D&O Diary
In the same December 11, 2020 Order in which it rejected the bid by the Texas Attorney General to overturn the results of the 2020 Presidential election, the U.S. Supreme Court also agreed to take up a case involving the effort of Goldman Sachs to overturn the certification of a class in the long-running securities […]
How 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 […]