By Antonia Apps, George S. Canellos, and Tawfiq Rangwala, Milbank LLP
The Supreme Court’s decision in Liu v. SEC curtailed the SEC’s authority to obtain disgorgement of ill-gotten gains as a remedy in enforcement actions, and left unanswered many consequential questions surrounding disgorgement, according to Milbank’s Antonia Apps, George S. Canellos, and Tawfiq Rangwala. In their view, the ruling threatens the SEC’s ability to obtain disgorgement in common categories of cases such as insider trading, Foreign Corrupt Practices Act matters, and cases arising under rules for the general protection of markets and investors. After reviewing the ruling, they consider the many open questions posed by the Supreme Court’s position in Liu which they believe will have to be answered through case-by-case development in the lower courts.
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