On June 5, 2017, the United States Supreme Court unanimously held that disgorgement in SEC enforcement actions operates as a penalty in Kokesh v. Securities and Exchange Commission. This means that disgorgement is subject to the federal five-year statute of limitations under 28 U.S.C. §2462. The Kokesh decision settled a dispute between the US Court of Appeals for the Tenth Circuit and the Eleventh Circuit, and in the process undermined a key source of large recoveries by the SEC in FCPA resolutions, and in SEC proceedings more broadly.
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