SEC Disgorgement Lives to See Another Day After Supreme Court’s Liu v. SEC Ruling
On June 22, 2020, in Liu v. SEC, the Supreme Court affirmed in an 8-1 ruling that the Securities and Exchange Commission may continue to pursue disgorgement awards under the federal securities law provided that the award is capped at the defendant’s net profits, and further, provided that the award is made for the benefit of wronged investors. In so holding, the Court struck a middle ground by narrowly preserving one of the most powerful enforcement mechanisms available to the agency but limiting the awards more closely than the awards the SEC has sought over the years.