Until June 2017, when the Supreme Court issued its unanimous opinion in Kokesh v. SEC, the Securities and Exchange Commission (“SEC” or “Commission”) took the position that it could obtain disgorgement from defendants no matter how long ago the alleged wrongdoing occurred. Kokesh changed that, holding that SEC disgorgement is a penalty, not an equitable remedy, and therefore subject to the five-year statute of limitations codified in 28 U.S.C. § 2462 (“§ 2462”). Courts and the SEC have been grappling with the ramifications of Kokesh ever since.

As we begin 2018, we pause here to survey the decision’s immediate effects and to consider additional questions we expect will be addressed as the ramifications of the decision unfold. The most obvious and immediate effects of Kokesh follow from the decision’s most direct holding: the Commission has acknowledged that it can no longer seek disgorgement for conduct outside of a five-year statute of limitations, and defendants have challenged previous disgorgement orders and holdings for conduct that occurred outside that time period….