Kokesh v. Securities and Exchange Commission
- Case Date: 3/3/2017
- Project Name: Civil Justice Reform
On June 5, 2017, the U.S. Supreme Court ruled that the Securities and Exchange Commission may not seek “disgorgement” of gross income allegedly derived from securities-law violations that occurred decades ago. The decision was a victory for WLF, which filed a brief urging reversal of an appeals court decision that upheld SEC’s position. The Court agreed with WLF that a federal statute, 28 U.S.C. § 2462, imposes a strict five-year statute of limitations on any “penalty” sought by SEC. The Court rejected SEC’s claim that requiring a wrongdoer to pay to the government all his allegedly ill-gotten income (termed “disgorgement” by SEC) did not constitute a “penalty.” This decision imposes significant restrictions on a broad range of federal agencies (not simply SEC) because § 2462 imposes a five-year catch-all limitations period on any federal enforcement action to which no other statute of limitations explicitly applies.
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