SEC Disgorgement Powers Can Apply Retroactively in Newer Cases

A federal judge declined to dismiss the SEC’s fraud claims against individuals accused in a stock investment scheme, declaring that Congress’ decision to give the agency more time to pursue ill-gotten gains applies retroactively in recently filed cases.

Congress doubled the SEC’s statute of limitations for disgorgement in intentional fraud cases to 10 years, passed as amendments in the 2021 National Defense Authorization Act (NDAA). The change applied “to any action or proceeding that is pending on, or commenced on or after” the statute was enacted, according to the law.

The NDAA’s language indicates “an express mandate” that the statute ...