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Expanded SEC Remedies Under the National Defense Authorization Act

Codifying the SEC's Ability to Pursue Ill-Gotten Gains

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Tuesday, March 16, 2021

Recorded event now available

or call 1-800-926-7926

This CLE course will discuss the evolution of disgorgement as a remedy for securities violations, how the SEC currently exercises its disgorgement authority, and how the National Defense Authorization Act for Fiscal Year 2021 (NDAA) will expand on those capabilities in the future.


Disgorgement is one of the most important tools in the SEC's enforcement arsenal. The recently enacted NDAA includes new provisions that significantly clarify and expand the SEC's ability to pursue remedial sanctions, including disgorgement and penalties. It also extends the statute of limitations applicable to such remedies. The SEC will likely utilize its expanded authority to pursue securities violations more aggressively. There are nuances to the new provisions which require careful examination by securities counsel.

Two Supreme Court cases previously limited the SEC's disgorgement authority: Kokesh v. SEC imposed a five-year time bar and called into question whether the SEC is allowed to obtain disgorgement at all in a civil action, while Liu v. SEC held that disgorgement is an authorized remedy under Section 21(d)(5) of the 1934 Act but that the amount disgorged cannot exceed an individual wrongdoer's net profits.

The new NDAA provisions explicitly authorize the SEC to seek disgorgement for securities violations, settling doubts created under Liu and Kokesh. They also extend the SEC's deadlines to seek disgorgement. The new legislation includes a five-year general statute of limitations, a 10-year statute of limitations for fraud-based violations, and an unlimited tolling provision for individuals located outside the United States.

Listen as our authoritative panel discusses the SEC's expanded disgorgement authority provided under the NDAA and its implications for regulated entities going forward.



  1. Disgorgement actions generally; conceived as an equitable remedy without statutory basis
  2. Key cases limiting SEC's disgorgement authority
    1. Kokesh v. SEC
    2. Liu v. SEC
  3. The NDAA amendments
    1. Express codification of the SEC's power to obtain disgorgement of unlawful gains
    2. Extending the statute of limitations in various contexts
  4. Key takeaways
    1. More aggressive SEC enforcement
    2. Actions companies should take now


The panel will review these and other important issues:

  • What is the rationale behind disgorgement as an equitable remedy exercisable by the SEC?
  • How did the Kokesh and Liu cases impact the SEC's disgorgement powers?
  • What disgorgement remedies are now provided for under the NDAA?
  • What changes were made to the statute of limitations in various scenarios?
  • What are the key takeaways of the new provisions?


Levine, Sarah
Sarah L. Levine

Jones Day

Ms. Levine has broad experience in securities enforcement, investigation, complex litigation, and regulatory issues....  |  Read More

McKown, Joan
Joan E. McKown

Jones Day

Ms. McKown's practice focuses on investigations, enforcement actions and other proceedings with U.S. and foreign...  |  Read More

Tobin, Arielle
Arielle S. Tobin

Jones Day

Ms. Tobin defends corporations and their directors and officers in civil, criminal, and regulatory disputes, including...  |  Read More

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