On June 22, the US Supreme Court weighed in on a question it explicitly left open in Kokesh v. SEC – whether, and to what extent, the Securities and Exchange Commission (SEC) in a civil enforcement action may seek “disgorgement” as “equitable relief that may be appropriate or necessary for the benefit of investors” under §78u(d)(5). In an 8-1 decision, the Court in Liu v. SEC concluded that a disgorgement order can indeed qualify as “equitable relief,” subject to certain limitations. The case has important implications for how the SEC may seek disgorgement remedies in the future under the US Foreign Corrupt Practices Act and in other securities-related actions.
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