Supreme Court Conditionally Recognizes the SEC’s Right to Disgorgement

  Written by Taher Kameli & Chathan Vemuri The Securities and Exchange Commission (SEC) has long argued that as part of penalties sought from parties accused of unlawful activities in violation of securities laws, the SEC had a right to disgorge from the profits of the liable party as part of the remedies it could seek.[1] Disgorgement refers to a remedy by which parties who profited from illegal or wrongful conduct (“ill-gotten gains” so to speak) must return those profits that they made from that conduct to those they harmed in order to make them whole.[2] There

The Supreme Court’s Confirmation of SEC’s Disgorgements in Liu v. SEC

  Written by Taher Kameli & Julie Seong A recent United States Supreme Court decision confirmed that the Securities and Exchange Commission (SEC) can seek disgorgement of ill-gotten gains as an equitable remedy in SEC enforcement actions in federal court. Liu v. SEC was a case involving the SEC and married couple Charles Liu and Xing Wang, who was ordered to pay the $26.7 million they had collected from immigrants and misappropriated. On June 22, 2020, the Supreme Court’s Liu v. SEC ruling upheld the Securities and Exchange Commission’s ability to recover ill-gotten gains from those who commit financial and securities fraud. There