1st Circ. Skeptical Of F-Squared SEC Disgorgement Clawback

Law360, Boston (September 9, 2019, 7:07 PM EDT) -- A First Circuit panel was skeptical Monday that the liquidation trustee for F-Squared Investment Management LLC's bankruptcy estate can claw back a $30 million disgorgement from the SEC, given that F-Squared waived judicial review when it agreed to the payment.

U.S. Circuit Judge William J. Kayatta Jr. said at oral arguments that he was at a "complete loss" to understand how the trustee could overcome the company's decision to waive review, even in light of a 2017 U.S. Supreme Court decision — Kokesh v. SEC — which held that disgorgement is subject to a five-year statute of limitations for the U.S. Securities...

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