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Jun 10, 2016

Eleventh Circuit Rules Disgorgement Subject to Five-Year Limitations Period, Ruling Against SEC

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On May 26, 2016, a three-judge panel of the United States Court of Appeals for the Eleventh Circuit issued SEC v. Graham, a significant decision that, at least in the Eleventh Circuit, limits the ability of the Securities and Exchange Commission (“SEC” or “Commission”) to obtain disgorgement of ill-gotten gains in civil injunctive actions filed more than five years after the allegedly violative conduct. In so doing, the Eleventh Circuit ruled that 28 U.S.C. § 2462 — the federal catch-all five-year statute of limitations — applies to the equitable remedy of disgorgement, because disgorgement is nothing other than “forfeiture,” which is expressly covered by Section 2462. Graham comes after the Supreme Court’s 2013 decision in Gabelli v. SEC where the Court declined to consider whether claims for disgorgement were subject to Section 2462 but signaled that it was generally in favor of limiting the government’s ability to obtain relief for conduct long in the past, noting that “even wrongdoers are entitled to assume that their sins may be forgotten.”

View full memo, Eleventh Circuit Rules Disgorgement Subject to Five-Year Limitations Period, Ruling Against SEC

Authors and Contributors

Stephen Fishbein

Partner

Litigation

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+1 212 848 4424

New York

Adam Hakki

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+1 212 848 4924

+1 212 848 4924

New York

Mark D. Lanpher

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+1 202 508 8120

+1 202 508 8120

Washington DC

Christopher L. LaVigne

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+1 212 848 4432

+1 212 848 4432

New York

John A. Nathanson

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+1 212 848 8611

+1 212 848 8611

New York

Patrick D. Robbins

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+1 415 616 1210

+1 415 616 1210

San Francisco

Philip Urofsky

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+1 202 508 8060

+1 202 508 8060

Washington DC

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