Thomas A. McKay of Morvillo Abramowitz Grand Iason & Anello. Courtesy photo Second Circuit Limits the SEC's Disgorgement Power
In its recent decision in 'SEC v. Govil', the Second Circuit limited the SEC's power by construing "victims" to be limited to those who suffer pecuniary harm. This holding will likely prevent the SEC from obtaining disgorgement in numerous types of cases, such as those involving books and records or registration violations, and even insider trading.
November 22, 2023 at 10:00 AM
7 minute read
In Liu v. SEC, 140 S. Ct. 1936 (2020), the Supreme Court limited the U.S. Securities and Exchange Commission's (SEC) disgorgement power to cases where disgorgement is "awarded for victims." In its recent decision in SEC v. Govil, 2023 WL 7137291 (2d Cir. Oct. 31, 2023), the U.S. Court of Appeals for the Second Circuit further limited the SEC's power by construing "victims" to be limited to those who suffer pecuniary harm. This holding will likely prevent the SEC from obtaining disgorgement in numerous types of cases, such as those involving books and records or registration violations, and even insider trading.
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