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Seller of ‘Fraudulent’ Securities Loses Challenge to SEC Award

July 20, 2022, 5:57 PM

A man who allegedly violated securities laws by selling shares in “a thicket of ersatz energy companies” owes $4.2 million to the government in disgorgement and civil penalties, the Fifth Circuit affirmed, addressing new legal developments.

A 2020 U.S. Supreme Court decision, Liu v. SEC, may be read to impose additional requirements on the Securities and Exchange Commission to obtain the remedy of disgorgement, Judge Jerry E. Smith said Tuesday for the appeals court. But Congress subsequently amended the Securities Exchange Act of 1934 so as to authorize disgorgement awards as courts made them before Liu, Smith said. ...