Annual Defense Bill Extends SEC's Disgorgement Shot Clock

By Dean Seal (December 21, 2020, 11:27 PM EST) -- The annual defense bill that President Donald Trump is threatening to veto this week, despite overwhelming support from Congress, contains amendments that would quietly strengthen the government's ability to seek disgorgement for securities law violations.

The 2021 National Defense Authorization Act, the $740.5 billion defense legislation approved by the U.S. Senate on Dec. 11, not only supplies the U.S. Securities and Exchange Commission for the first time ever with the statutory authority to seek disgorgement but also tacks a 10-year statute of limitations on the remedy as well.

Unlike fines or other penalties available to the SEC, disgorgement has long been touted...

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