Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Challenge to SEC's Disgorgement Authority Reaches Supreme Court
On Nov. 1, 2019, the U.S. Supreme Court granted certiorari in Liu v. Securities and Exchange Commission to address a question that, until fairly recently, seemed clear beyond cavil: whether the SEC has authority to obtain disgorgement in civil actions to enforce the federal securities laws. Since the 1970's, disgorgement of ill-gotten gains has been a powerful and frequently utilized weapon in the SEC's arsenal. In its June 2017 decision in Kokesh v. SEC, 137 S. Ct. 1635 (2017), the Supreme Court characterized SEC disgorgement as a "penalty" rather than an equitable remedy but expressly declined to decide whether courts possess authority to order disgorgement in SEC enforcement proceedings. In Liu, the Court will address head-on the question left open in Kokesh. The outcome of Liu has the potential to upset long-standing precedent and practices. If the Court further restricts the SEC's ability to obtain disgorgement, the decision will have significant ramifications for the SEC's enforcement program.
Evolution of the SEC's Authority
No statute expressly authorizes courts to award disgorgement to the SEC in civil enforcement actions. Rather, by statute, the SEC in district court proceedings may obtain only injunctions, civil monetary penalties, bars and suspensions from certain types of employment in the securities industry, and equitable relief. See, 15 U.S.C. §§77t; 78u(d). Nevertheless, for decades the SEC routinely has sought — and courts have granted — disgorgement as a component of equitable relief.
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It
Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Blockchain Domains: New Developments for Brand Owners
Blockchain domain names offer decentralized alternatives to traditional DNS-based domain names, promising enhanced security, privacy and censorship resistance. However, these benefits come with significant challenges, particularly for brand owners seeking to protect their trademarks in these new digital spaces.