WASHINGTON – On news that the U.S. Supreme Circuit issued its decision in Liu v. SEC, holding that “a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is” permissible equitable relief, CAC President Elizabeth Wydra issued the following statement:

Today’s ruling that federal courts may impose disgorgement awards in cases involving violations of the nation’s securities laws, requiring ill-gotten gains to be distributed from perpetrators to victims, is an important victory. 

As we argued on behalf of Members of Congress, the courts of appeals have unanimously held for over fifty years that disgorgement falls within the general equity powers that Congress gave district courts when they hear cases involving violations of the nation’s securities laws. In fact, Congress has premised key provisions of law in this area on the existence of disgorgement authority. The Supreme Court was right not to disturb Congress’s legislative plan that disgorgement be available to help enforce the nation’s securities laws.

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Resources:

CAC brief on behalf of Members of Congress in Liu v. SEC: https://www.theusconstitution.org/litigation/liu-v-sec/ 

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Constitutional Accountability Center is a think tank, public interest law firm, and action center dedicated to fulfilling the progressive promise of the Constitution’s text and history. Visit CAC’s website at www.theusconstitution.org.

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