Under the Biden Administration, the U.S. Securities and Exchange Commission is expected to be aggressive in bringing enforcement actions against alleged corporate wrongdoers.

Under the Biden Administration, the U.S. Securities and Exchange Commission is expected to be aggressive in bringing enforcement actions against alleged corporate wrongdoers. In fact, the stage is already set for a broad range of SEC enforcement activities in the corporate arena based on actions the SEC brought in 2020.…

While the SEC may seek disgorgement, it may not, under the guise of disgorgement, seek a remedy beyond traditional equitable principles

In a much anticipated ruling, the United States Supreme Court held today in Liu v. Securities and Exchange Commission that a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for “the benefit of investors” is “equitable relief” permissible under 15 U. S. C. §78u(d)(5).[1] In reaching its decision, the Court analyzed categories of relief “typically available in equity,” concluding that “equity practice [has] long authorized courts to strip wrongdoers of their ill-gotten gains.”[2]  However, in vacating the decision of the Ninth Circuit Court of Appeals and remanding for further proceedings, the Court left open the questions of whether disgorgement awards not paid to victims can be consistent with the statutory requirement that such a remedy be imposed “for the benefit of investors,” and whether concepts of equity contemplate any circumstance under which a joint-and-several award of disgorgement would be appropriate.

The US Securities and Exchange Commission (SEC) Division of Enforcement recently issued its 2019 Annual Report (ENF Annual Report), which you can read in full here. Of course, the headline is always how many cases did the Enforcement Staff bring and how much money did they collect and distribute and,…