Bloomberg Law Analysis

ANALYSIS: Defense Bill Veto Override Adds to SEC Penalty Arsenal

Jan. 8, 2021, 1:22 PM

Congress tucked a nice surprise for the SEC Enforcement Division deep inside the voluminous National Defense Authorization Act. Section 6501 of the measure, enacted on Jan. 1 via an override of a presidential veto, explicitly authorizes the SEC to bring claims for disgorgement in federal district courts and extends the limitations period for fraud-based disgorgement claims from five to 10 years.

The Kokesh Legacy

The legislation resolves a problem resulting from the Supreme Court’s 2017 Kokesh decision. In that case, the Court found that disgorgement orders were penalties and thus subject to the five-year statute of limitations in 28...

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