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SEC Enforcement Action – Equitable Relief

By: Derek Hawkins//August 19, 2020//

SEC Enforcement Action – Equitable Relief

By: Derek Hawkins//August 19, 2020//

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United States Supreme Court

Case Name: Charles C. Liu, et al., v. Securities and Exchange Commission

Case No.: 18-1501

Focus: SEC Enforcement Action – Equitable Relief

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.

Vacated and remanded

Dissenting: THOMAS, J., filed a dissenting opinion.

Concurring:

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.

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