In its June 2017 decision in Kokesh v. SEC (discussed here), the U.S. Supreme Court held that disgorgement in an SEC enforcement action represents a “penalty,” and therefore a SEC enforcement action claim for disgorgement is subject to a five-year statute of limitation. The Court emphasized that it was only deciding the statute of limitations issue, and was emphatically not reaching the larger issue of whether the SEC has the proper authority to order disgorgement in enforcement proceeding. As discussed here, last November, in the case of Liu v. SEC, the U.S. Supreme Court agreed to take up the  larger issue to determine whether or not the SEC may seek may seek and obtain disgorgement as “equitable relief” for a securities law violation. On June 22, 2020, the Supreme Court issues its opinion in the Liu case. As discussed below in a guest post written by David Topol of the Wiley law firm, the court has ruled that the SEC may collect disgorgements as “equitable relief,” subject to important constraint. I would like to thank David for allowing me to publish his 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 David’s article.
Continue Reading Guest Post: Liu v. SEC: What Is “Disgorgement”?