Disgorgement or Accounting for Profits? An Analysis of Liu v. SEC

In Liu v. SEC (June 22, 2020), the Supreme Court of the United States held, in an enforcement action by the Securities and Exchange Commission, that a disgorgement order that did not exceed a wrongdoer’s net profits and was awarded for victims constituted “equitable relief” that was permissible under the Securities Exchange Act of 1934, 15 U.S.C. § 78u(d)(5), rather than punitive sanctions, which were historically excluded from the definition of “equitable relief” under the Act. 

This episode will discuss the Supreme Court’s decision, both the Securities Act of 1933 and the Securities Exchange Act of 1934, and whether the Court’s reference to “equitable relief” includes the remedy of “disgorgement.” Douglas Laycock, who filed an amicus brief in support of neither party, will lead this discussion. 



The full episode transcript is available here. Please excuse typos due to inaudible passages or transcription errors.


Liu v. SEC (2020)

Liu v. SEC Restitution Scholars Amiscus Brief (2020)

Romag Fastners Inc. v. Fossil Inc. (2020)

Kokesh v. SEC (2017)

Kansas v. Nebraska and Colorado (2015)

Petrella v. MGM Inc. (2014)

SEC v. Cavanagh (2006)

SEC v. Texas Gulf Sulphur Co. (1970)

Janigan v. Taylor (1965)

Falk v. Hoffman (1922)

Newton v. Porter (1877)