On 23 February, a post on the Compliance and Enforcement blog from the New York University School of Law says that for 50 years the SEC has sought “disgorgement” of the proceeds of unlawful activity as one of its main remedies in federal court, even though there is no explicit statutory authority for doing so. Disgorgement is described as being justified as an exercise of courts’ inherent equitable powers to deprive a defendant of unjust enrichment via a restitution-style remedy. It is defined by the online dictionary Investopedia as “a repayment of ill-gotten gains that is imposed on wrongdoers by the courts. Funds that were received through illegal or unethical business transactions are disgorged, or paid back, with interest to those affected by the action. Disgorgement is a remedial civil action, rather than punitive civil action”. On 3 March, the Supreme Court will hear oral argument in a case in which the Justices have agreed to consider whether courts can order disgorgement as an “equitable remedy” for a violation of the securities laws. The post discusses the case’s legal backdrop, some of the ways the Court could decide it, and some of its potential consequences.
https://wp.nyu.edu/compliance_enforcement/2020/02/22/the-supreme-court-takes-on-sec-disgorgement/
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