US Congress Affirms and Expands SEC’s Disgorgement Authority in Annual Defense Spending Bill

The legislation - passed via the first congressional override of the Trump presidency - extends the SEC’s ability to obtain disgorgement for violations of federal securities laws.

Key Points:

..As amended, the Securities Exchange Act of 1934 now expressly authorizes the SEC to seek disgorgement in both pending and future cases filed in federal district court.

..After being limited to a five-year disgorgement period by a 2017 Supreme Court ruling (Kokesh v. SEC), the SEC now may pursue disgorgement awards using an expanded 10-year limitations period for certain scienter-based violations, and was granted a 10-year lookback period for other forms of equitable relief in all cases.

Please see full Alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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