Kokesh v. SEC

An SEC enforcement action brought in federal court seeking civil penalties, disgorgement, and an injunction is subject to 28 USC 2642’s five-year limitations period for suits on a statutory penalty.  An SEC enforcement action brought in federal court seeking civil penalties, disgorgement, and an injunction is subject to 28 USC 2642’s five-year limitations period for suits on a statutory penalty.  The civil penalties are clearly a statutory penalty, but so also is disgorgement.  It is ordered upon a finding of a violation of public rights under the securities laws, not to redress private wrongs.  Also, disgorgement is ordered to punish and deter, not compensate victims.  The disgorgement is set by the defendant’s profits, not victims’ losses, and the district court has discretion to determine whether to distribute disgorgement to victims or not.

United States Supreme Court (Sotomayor, J.); June 5, 2017; 2017 WL 2407471

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