In a landmark May 26, 2016 decision, the U.S. Court of Appeals for the Eleventh Circuit became the first appellate court to rule that Securities and Exchange Commission (''SEC'') actions for disgorgement are subject to a statute of limitations. In that case, SEC v. Graham, No. 14-13562 (11th Cir. March 26, 2016), the court held that disgorgement claims, not just civil monetary penalties, are subject to the five-year limitations period of 28 U.S.C. § 2462. This holding, if adopted by other courts, could significantly decrease the financial exposure faced by targets of SEC enforcement actions. In addition, the decision could provide a defense against disgorgement claims in actions brought by the Consumer Financial Protection Bureau (''CFPB'').
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Originally published by Bloomberg BNA's Securities Regulation & Law Report, August 2016
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