In Bloomberg Law, Jeremiah Williams and Amy Jane Longo Discuss Pushback on Aggressive SEC Enforcement

The U.S. Securities and Exchange Commission has become more aggressive in pursuing enforcement remedies, leading many companies and individuals accused of securities law violations to push back. In a Bloomberg Law article, litigation & enforcement partner Jeremiah Williams said that courts “have been more involved in the SEC and how it’s doing remedies. There’s been more scrutiny, more litigation in this area.”

There are a number of recent and ongoing cases that may indicate how courts will react to the argument that ramped-up SEC disgorgement penalties are “improperly punitive.” Amy Jane Longo, partner in the litigation & enforcement practice, explained that this tactic is “part of a trend to try to rein in SEC enforcement and remedies by attacking the relief as punitive and framing it as overly penalizing the defendant.”

Defendants are also testing the SEC and courts’ views on particular details concerning disgorgement. “I think it falls to individual cases for parties to try to push the law further on areas like what kinds of business expenses can be deducted,” Amy commented. Business expenses, as well as the question of whether each defendant in a case should be charged the full disgorgement amount are two matters that are currently playing out.