Insurability of Disgorgement and Restitution Payments: 2021 National Defense Authorization Act

Impact on Liu v. SEC, SEC v. Kokesh, and Recent State Law Decisions

A live 90-minute CLE video webinar with interactive Q&A

Tuesday, September 28, 2021

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, September 3, 2021

or call 1-800-926-7926

This CLE webinar will address insurance coverage for disgorgement and other remedies requiring restitution of "ill-gotten gains." The program will explore the effect of Section 6501 of the National Defense Authorization Act for Fiscal Year 2021 (NDAA) on the principles in Kokesh v. SEC and Liu v. SEC, and the lessons of two Delaware Supreme Court decisions on the insurability of settlements of fraud claims and the scope of certain "fraud/profit exclusions" in Sycamore Partners v. Endurance American Ins. Co., et al. and RSUI Indemnity Co. v. David H. Murdock and Dole Food Co. Inc.


Government enforcement actions continue to recover hundreds of millions of dollars in disgorgement orders annually, with the SEC leading the pack. Whether coverage exists for disgorgement or restitution of purported "ill-gotten gains" under D&O and other professional liability policies remains a pervasive issue in jurisdictions across the country.

Kokesh v. SEC declared disgorgement to be a "penalty." Insurers seized on this to deny coverage for these and similar payments as against public policy. Then, in Liu, the Court held that the SEC has authority to award disgorgement under its authority to seek "equitable relief" when the award was limited to net profits awarded to victims, not paid to the Treasury.

Then in January 2021, the NDAA expressly authorized the SEC to seek disgorgement, incorporating some but perhaps not all the conditions set out in Kokesh. But being specifically authorized to seek disgorgement does not necessarily resolve the insurability issue, which continues to affect litigation and negotiation strategies of both companies and individuals.

Listen as the experienced panel provides practical guidance gleaned from the recent seminal decisions and explains the most compelling arguments for and against these claims--ranging from broad public policy considerations to close reading of exclusions.



  1. Overview
  2. Recent cases
  3. Principal issues
  4. Policyholder perspectives
  5. Insurer perspectives
  6. Practical strategies and best practices


The panel will review these and other relevant issues:

  • When does an insured's loss represent disgorgement of an improper claim?
  • What guidance do In re TIAA-CREF Ins. Appeals, Sycamore Partners v. Endurance American Ins. Co., et al., and RSUI Indemnity Co. v. David H. Murdock and Dole Food Co. Inc. provide on approaching coverage disputes?
  • Do the NDAA amendments change the analysis?
  • When does an alleged wrongdoer's liability insurance cover an aggrieved party's claim for restitution?
  • What are the fundamental legal principles and considerations applicable to the disgorgement inquiry?
  • How have courts interpreted the public policy exclusion for "uninsurable loss"?
  • When analyzing courts' efforts to determine the prevailing public policy in the context of whether insurance should be allowed to cover claims for restitution, on what basis do courts have the authority to decide public policy?
  • What role does fact-finding play in identifying uninsurable disgorgement?


Margolies, Melinda
Melinda B. Margolies

Kaufman Borgeest & Ryan

Ms. Margolies focuses her practice on insurance coverage and commercial disputes. She has worked extensively with...  |  Read More

Williams, Sean
Sean J. Williams

Special Counsel
Pillsbury Winthrop Shaw Pittman

Mr. Williams is a litigator whose practice focuses on resolving insurance coverage disputes for corporate and...  |  Read More

Attend on September 28

Early Discount (through 09/03/21)

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Early Discount (through 09/03/21)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include program handouts.

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