Simpson Thacher Attorneys Author The D&O Diary Article on SEC’s Authority to Seek Disgorgement
06.30.20
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Steve Cutler, Mike Osnato, Meaghan Kelly and M Moore authored an article titled, “Supreme Court Affirms SEC’s Disgorgement Remedy, but Places Limits on Its Use,” which was published by The D&O Diary. The article analyzed the Supreme Court’s recent decision in Liu v. SEC, in which it addressed questions surrounding the SEC’s authority to seek disgorgement in federal court proceedings. In an 8-1 decision, the Court upheld but circumscribed the SEC’s ability to seek disgorgement, holding that disgorgement constitutes permissible “equitable relief” under 15 U.S.C. § 78u(d)(5), but only where disgorgement is based on net profits and ordinarily where disgorged funds are distributed to victims. The article also provided practical takeaways of this decision.
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