Supreme Court Considers Whether to Limit SEC’s Right to Seek Disgorgement in Civil Proceedings
03.05.20
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The Supreme Court heard oral arguments in Liu v. Securities and Exchange Commission, No. 18-1501, on Tuesday, March 3, 2020, to decide whether existing legislation authorizes the SEC to seek disgorgement of profits as “equitable relief” in district court proceedings when the Commission enforces the Securities Act of 1933 and the Securities Exchange Act of 1934. Although several justices observed that disgorging profits was a traditional equitable remedy, many expressed concern about the punitive nature of the SEC disgorgement in the instant case. In particular, the justices expressed concern that defendants might be forced to disgorge all money they received (and not just profits) and that many disgorgement payments are kept by the government and not returned to victims.
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