How Supreme Court Ruling on Disgorgement Will Affect Advisors

Michael Birnbaum, Haimavathi Marlier, Jina Choi, and Gerardo Gomez Galvis authored an article for ThinkAdvisor covering the Supreme Court’s opinion in Liu v. SEC, which held that the Securities and Exchange Commission (SEC) may pursue, and courts may grant, disgorgement, but only when the disgorgement award “does not exceed a wrongdoer’s net profits and is awarded for victims.”

“We expect the SEC will likely continue to focus on investment advisory cases as an enforcement priority and the Supreme Court’s decision in Liu will have a modest impact on the staff’s analysis to seek disgorgement in these types of cases, whether litigated or settled,” the authors wrote. “The SEC’s ability to pursue disgorgement in such cases will allow the SEC to continue to bring adviser cases as a significant part of its docket in the months and years ahead.”

Read the full article.