Over the last several years, the United States Supreme Court has issued a series of decisions addressing the SEC’s powers to seek disgorgement against alleged securities law violators. Last Thursday, in the latest decision in the recent series, the Court issued a unanimous decision holding in Sripetch v. SEC that the SEC can seek disgorgement as a remedy even if the agency cannot prove that investors suffered a financial loss. The decision, which resolves a split between the federal judicial circuits on the issue, represents an affirmation of the SEC’s disgorgement authority. The Supreme Court’s June 4, 2026, ruling can be found here.
Continue Reading U.S. Supreme Court: Financial Loss Not a Precondition for SEC Disgorgement Authority
In the latest development a long-running D&O insurance coverage dispute, a Delaware Court has held that Verizon’s D&O insurance program covers the company’s $95 million settlement of a bankruptcy Trustee’s fraudulent transfer claim. In reaching this conclusion, the Court held, among other things, that the fraudulent transfer claim was a “Securities Claim” within the meaning of Verizon’s primary D&O insurance policy. The specifics of the court’s analysis of this issue underscores how complicated the question of what constitutes a “Securities Claim” can be. A copy of Delaware Superior Court Judge Eric Davis’s October 20, 2022 opinion can be found 
Yet another Delaware court has issued a noteworthy management liability insurance coverage opinion. In a detailed September 12, 2022 opinion in a dispute between Godiva Chocolatier and its management liability insurers over coverage for underlying consumer protection claims against the company, Delaware Superior Court Judge Mary M. Johnston rejected many – but not all — of the insurers’ coverage defenses. A copy of Judge Johnston’s opinion can be found 
In the following guest, Yaminah Williams, Assistant Vice President, Hiscox USA, Alicia Garcia, Claims Counsel, Hiscox USA, Katherine Hausmann, Senior Complex Claims Specialist, Hiscox USA, Elan Kandel, Member, Bailey Cavalieri LLC and James Talbert, Associate, Bailey Cavalieri LLC, review the key 2001 D&O insurance coverage decisions. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
In the latest development in the long-running saga involving the efforts by J.P. Morgan to obtain D&O insurance coverage for the $140 million “disgorgement” that its predecessor-in-interest, Bear Stearns, paid to settle SEC market-timing allegations, the New York Court of Appeals (the state’s highest court) has reversed the intermediate appellate court’s ruling that the payment represented a “penalty” for which coverage is precluded. The Court of Appeals rejected the intermediate appellate court’s conclusion, made in reliance on the U.S. Supreme Court’s 2017 Kokesh decision, that a “disgorgement” payment to the SEC is a “penalty.” The Court of Appeals held that Kokesh did not control, and that because the payment was compensatory in nature, it did not represent a “penalty” for which coverage is precluded under the policies. The Court’s November 24, 2021 opinion can be found