The U.S. Supreme Court put new limits in place on the Securities and Exchange Commission’s (SEC) routine practice of forcing defendants to surrender any profit they gained through fraud if that profit came about as part of the SEC’s carrying-out of investor-protection laws in federal courts.
The 8-1 ruling (with Judge Thomas the lone dissenter) came with two caveats:
1. The court reasserted that the SEC indeed has the authority to pursue disgorgement -- the act of giving up something (such as profits illegally obtained) on demand or by legal compulsion -- a common remedy used in U.S. securities law.
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