SEC Power to Recoup Illegal Gains Put at Risk in Supreme Court Case
- Supreme Court to hear arguments on ‘disgorgement’ orders
- Commission returns most ill-gotten gains to harmed investors
This article is for subscribers only.
The Securities and Exchange Commission is bracing for a U.S. Supreme Court ruling that could eviscerate one of the agency’s most potent weapons by slashing its power to recoup billions of dollars in illegal profits from wrongdoers.
The court hears arguments Tuesday on contentions that the SEC can’t use a traditional legal tool known as “disgorgement” to collect money from someone the commission sues in federal court. Disgorgement is distinct from fines and other penalties the SEC seeks, in part because it’s geared toward reimbursing victims.