SEC Dealt Major Blow With Justices' Disgorgement Decision

Law360, New York (June 5, 2017, 10:14 PM EDT) -- The U.S. Securities and Exchange Commission took a significant hit to its enforcement arsenal Monday morning as the U.S. Supreme Court unanimously held that agency-sought disgorgement is a penalty subject to time limits, a ruling experts say could give the SEC more headaches down the road.

The justices, including recently confirmed Justice Neil Gorsuch, unanimously found that SEC disgorgement is a civil penalty and is subject to a five-year statute of limitations, overturning a Tenth Circuit decision upholding $35 million in disgorgement and $18 million in prejudgment interest against New Mexico investment adviser Charles R. Kokesh.

The high court's ruling was...

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