High Court Justices Question SEC’s Power to Recoup Billions (1)

U.S. Supreme Court justices appeared ready to limit the Securities and Exchange Commission’s ability to recoup ill-gotten profits from wrongdoers, hearing arguments on a legal tool the commission has used to collect billions of dollars.

In an hour-long session in Washington Tuesday, the justices considered the SEC’s use of “disgorgement” to collect money from someone the commission sues in federal court. Disgorgement is distinct from fines and other penalties the SEC seeks, in part because it’s geared toward reimbursing victims.

The justices didn’t appear willing to altogether eliminate disgorgement, which opponents say the SEC is using as an illegal punishment. ...