Through legislation and litigation over the course of more than three decades, the SEC has obtained ever greater and more flexible remedies, in multiple forums, for violations of the federal securities laws. A string of judicial rulings gradually clarified and expanded the scope of the remedy of disgorgement -- a purportedly equitable form of relief once held to principally serve the purpose of stripping securities law violators of the fruits of their misconduct – and made it one of the most potent and versatile weapons in the SEC's enforcement arsenal. In its unanimous 2017 decision in Kokesh v. SEC, however, the Supreme Court dealt a significant blow to the SEC's enforcement program by subjecting this remedy to a 5-year statute of limitations. In an article in Securities Regulation Daily and The Federal Securities Law Reporter, " Supreme Court Upends SEC Disgorgement Remedy," Milbank partners Antonia M. Apps, George S. Canellos, and Tawfiq S. Rangwala explain why the High Court's decision last month in Liu v. SEC arguably represents an even greater curtailment of this remedy, with ramifications for a broad cross section of the SEC's traditional enforcement docket, including insider trading cases, FCPA cases, and cases arising under rules for the general protection of markets and investors.

Litigation associates Jacob Jou and Christopher Almon also contributed to this article.

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Originally published 18 July, 2020

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