SCOTUS OKs SEC Disgorgement—But Imposes New Limitations
Last month, the Supreme Court’s decision in Liu v. SEC put to rest any concerns about the SEC’s general authority to seek disgorgement as an equitable remedy. One of the SEC’s main enforcement weapons, disgorgement requires wrongdoers to give up profits earned from illegal activity. The SEC routinely seeks disgorgement to prevent unjust enrichment and to deter future violations. In Liu, the Court held that the SEC can continue to seek disgorgement as proper equitable relief—so long as the amount disgorged does not exceed the wrongdoer’s net profits and the disgorged funds are generally transferred to victims.
