By Teresa Goody Guillen, Jeffrey D. Martino, Michelle N. Tanney and Baker Hostetler
Next week, the Supreme Court will hear arguments in SEC v. Liu, a case in which petitioners argue that because in Kokesh v. SEC the court held that disgorgement is a penalty, it cannot also be construed as an equitable remedy and is therefore a power that falls outside the scope of the SEC’s authority. According to attorneys at BakerHostetler, the importance of this challenge to the Commission’s ability to recover ill-gotten gains extends beyond the SEC, and could help upend the FTC’s consumer protection program and its authority to seek financial penalties in court. They look at the history of the SEC and FTC’s disgorgement powers, including the challenges those agencies have faced regarding those powers. They also consider the potential consequences if the Supreme Court ultimately rules in favor of the Liu petitioners.
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