Second Circuit Limits the SEC's Disgorgement Power

November 27, 2023  |  New York Law Journal

The Second Circuit’s recent decision in SEC v. Govil builds off the 2020 Supreme Court’s ruling in Liu v. SEC by introducing further constraints to the SEC’s disgorgement powers. Liu limited disgorgement to cases in which disgorgement is “awarded for victims,” and Govil specified that a victim is one who suffered “pecuniary harm.”  This pecuniary harm requirement may limit the SEC’s ability to seek disgorgement in many types of cases, including insider trading and registration violations, among others.  In the article “Second Circuit Limits the SEC’s Disgorgement Power,” Morvillo Abramowitz Grand Iason & Anello partner Tom McKay discusses the Govil decision and how it may affect the SEC’s enforcement powers.

Second Circuit Limits the SEC's Disgorgement Power (pdf | 126.78 KB)