Kokesh

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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 following guest post, Dan Gold, Thad Behrens, Kit Addleman, Emily Westridge Black, Carrie L. Huff, Timothy Newman, Matt McGee, and Odean L. Volker of the Haynes and Boone, LLP law firm review the key developments during 2019 in securities litigation and enforcement, including significant securities related decisions by the Supreme Court and federal appellate courts, key developments in SEC enforcement, and significant rulings in state law fiduciary litigation against directors and officers of public companies. A version of this article previously was published as a Haynes and Boone client alert. I would like to thank the authors for their willingness to allow 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.
Continue Reading Guest Post: 2019 Securities Litigation: Key Takeaways and Trends

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. In reaching this decision, the Court emphasized (in footnote 3 to the opinion) 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.

Having previously reserved this larger question in Kokesh, the Court has now agreed to take up a case that will address head-on the question of whether the SEC has the authority to order a disgorgement. On November 1, 2019, the Court granted the petition for a writ of certiorari in the case of Liu v. SEC, which will require the Court to decide whether the SEC may seek may seek and obtain disgorgement from a court as “equitable relief” for a securities law violation even though the Supreme Court determined in Kokesh that disgorgement is a penalty.  The Court’s November 1, 2019 order granting the writ of certiorari can be found here.
Continue Reading Supreme Court to Consider SEC’s Authority to Seek and Obtain Disgorgement

paul-weiss-large-300x53Last Friday, the U.S. Supreme Court granted cert in two cases involving the limitations periods under the federal securities laws. One case, as I noted in a post earlier this week, will address the question of whether or not the filing of a securities class action tolls the Securities Act’s statue of repose. The second case, Kokesh v. Securities and Exchange Commission (about which refer here), involves the question of whether or not the five-year statute of limitations applicable to SEC enforcement actions seeking civil penalties applies to disgorgement claims. In the following guest post, attorneys from the Paul Weiss law firm take a look at the case and the issues it presents, as well as its potential implications. I would like to thank the Paul Weiss attorneys for their willingness to publish their 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 Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: Supreme Court to Review Whether Statute of Limitations Applies to SEC Disgorgement Claims