Sripetch v. SEC · ¶44
Lower courts created the disgorgement remedy for securities-law violations in the 1970s. See ante, at 558. In 1971, the Second Circuit became the first to hold that the SEC could pursue a “restitution of profts” remedy based on a violation of the securities laws. SEC v. Texas Gulf Sul phur Co., 446 F. 2d 1301, 1307. The Second Circuit soon began to call this remedy “disgorgement.” SEC v. Manor Nursing Centers, Inc., 458 F. 2d 1082, 1105 (1972). It recognized that no statute “specifically authorize[d]” this new remedy, yet it believed that courts had equitable authority to create new remedies to deter securities-law violations. Id., at 1103–1104; but see Alexander v. Sandoval, 532 U. S. 275, 286 (2001). Disgorgement “then leaked from that laboratory and spread rapidly to each regional circuit.” Hallam, 42 F. 4th, at 327. In 2002, Congress amended the Exchange Act and authorized the SEC…Read in context ›
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