Restitution: Liu v. Securities and Exchange Commission :: 591 U.S. ___ (2020) :: Justia US Supreme Court Center

Restittuion: S.E.C.'s remedial authority in "equity" extends to disgorgement - with limits. Thomas, in dissent, would require that moneys disgorged be returned to the victims, not retained by the government. - gwc

Liu v. Securities and Exchange Commission :: 591 U.S. ___ (2020) :: Justia US Supreme Court Center

Justice Sotomayor delivered the opinion of the Court. (Thoms dissenting)

In Kokesh v. SEC, 581 U. S. ___ (2017), this Court held that a disgorgement order in a Securities and Exchange Commission (SEC) enforcement action imposes a “penalty” for the purposes of 28 U. S. C. §2462, the applicable statute of limitations. In so deciding, the Court reserved an antecedent question: whether, and to what extent, the SEC may seek “disgorgement” in the first instance through its power to award “equitable relief ” under 15 U. S. C. §78u(d)(5), a power that historically excludes punitive sanctions. The Court holds today that a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief permissible under §78u(d)(5). The judgment is vacated, and the case is remanded for the courts below to ensure the award was so limited.