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Buckley Commentary & Analysis

"Supreme Court will likely decide whether courts can order disgorgement in SEC enforcement proceedings" by Olivia A. Rauh

Olivia A. Rauh

The Supreme Court will hear arguments on March 3 in a case that will likely determine whether the SEC has statutory authority to seek disgorgement in enforcement actions, and whether the courts have authority to order it.

The SEC’s authority to seek disgorgement was virtually unquestioned until the Supreme Court cast doubt on it during oral arguments in Kokesh v. SEC, in 2017.  While evaluating whether SEC disgorgement was subject to a five-year statute of limitations, several justices expressed confusion over the SEC’s disgorgement authority in the first place. Chief Justice Roberts concluded that the question about the statute of limitations arose in part because “the SEC devised this remedy or relied on this remedy without any support from Congress.” Justice Kennedy questioned whether there was “specific statutory authority that makes it clear that the district court can entertain this [disgorgement] remedy.”

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