SEC Disgorgement Win Bolsters Ability to Recoup Ill-Gotten Gains

A Florida federal judge’s decision that transfer agent Island Stock Transfer Inc. must pay nearly $115,000 in disgorgement gives the SEC more legal ammunition to go after ill-gotten gains.

Congress last year expanded the Securities and Exchange Commission’s authority to pursue disgorgement even when victims of securities fraud won’t benefit from the payment—effectively overriding a US Supreme Court ruling that curtailed the SEC’s enforcement remedies, a district court judge found.

The Aug. 10 decision may be the first to directly address the issue. While not binding on other district courts, the decision gives the SEC a ruling to highlight when ...