Upholding SEC’s Disgorgement Power, SCOTUS Creates Certainty, But That Clarity May Not Last

Herrick partner, Maxim M.L. Nowak, spoke to The National Law Journal about the U.S. Supreme Court’s unanimous decision to preserve securities regulators’ disgorgement powers which could provide temporary clarity for attorneys representing clients subject to an SEC enforcement action.

The article notes the "decision states that under the principles of equitable relief, the SEC does not need to prove financial harm to seek disgorgement, as the remedy is meant to force a defendant to give unlawfully obtained profits to the victim whose interests the defendant invaded."

Disgorgement is one of the SEC’s "sharpest and most flexible enforcement tools," according to Max. In 2024, the SEC seized $6.1 billion in disgorgement, nearly triple the $2.1 billion obtained in civil penalties that same year.

Read the full article in The National Law Journal here. Access may require a subscription.