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Supreme Court Agrees to Determine Whether SEC Actions Seeking Disgorgement are Subject to Five-Year Limitations Period Set Forth in 28 U.S.C. § 2462

At the urging of both an individual petitioner and the SEC, the Supreme Court has agreed to resolve a recent circuit split as to whether the five-year limitations period applicable to SEC enforcement actions applies to the remedy of disgorgement. Kokesh v. SEC, __ S. Ct. __, No. 16-529, 2017 WL 125673 (U.S. Jan. 13, 2017). The issue is whether disgorgement is a “penalty” or “forfeiture” for purposes of the five-year limitations period in 28 U.S.C. § 2462, which applies to government actions seeking a “civil fine, penalty, or forfeiture.” If, on the other hand, disgorgement is an equitable remedy akin to injunctive relief, a long line of cases holds that the statute would not apply. Last year two U.S. Courts of Appeal reach diametrically opposed conclusions on this question. In May, the Eleventh Circuit held that disgorgement is a “forfeiture” subject to the five-year limitations period. See SEC v. Graham, 823 F.3d 1357, 1363-64 (11th Cir. 2016). Three months later, the Tenth Circuit held that disgorgement is neither a “penalty” nor a “forfeiture” and therefore is not subject to the five-year limitations period. See SEC v. Kokesh, 834 F.3d 1158, 1166-67 (10th Cir. 2016).

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Robert Horowitz, securities Litigation, Greenberg Traurig, insider trading lawyer, SEC legal counsel, class action attorney, consumer protection law
Shareholder; Co-Chair, Securities Litigation Practice

Bob Horowitz is Co-Chair of the firm's Securities Litigation Practice. His securities practice involves the defense of underwriters, issuers, directors, and officers in securities class actions and in SEC investigations and enforcement actions. Among his successful representations are a defense judgment after trial in an SEC action alleging insider trading against a money manager, summary judgment on the eve of trial dismissing a securities class action against a medical insurance company, dismissal of putative class action against the majority shareholder of a Russian...

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Donald S. Davidson, Greenberg Traurig, Market timing Lawyer, foreign securities regulator attorney
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Donald S. Davidson focuses his practice on a wide range of matters for broker-dealers, investment advisers, and investment companies. He has represented clients in litigation and in regulatory inquiries involving the SEC, FINRA and its predecessors, Department of Justice ("DOJ"), state securities regulators, and foreign securities regulators. These matters have included municipal finance, market timing, insider trading, revenue sharing, and issues arising under the Securities Act of 1933, the Securities and Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, various state blue-sky statutes, and SRO rules. He also advises clients on compliance and risk management issues.

Prior to joining the firm, Don practiced securities litigation at prominent law firms in San Francisco and New York. Before his tenure in defense law, he served as the deputy general counsel and senior vice president at UBS Financial Services Inc. (formerly PaineWebber Inc.) for over six years. At UBS, Don managed the Private Client Litigation Group, which handled all customer and broker-related litigation and arbitrations arising from the firm’s nationwide retail branches. He also advised business clients at UBS on risk management, best practices, and changes in the legal and regulatory environment.

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Jason Lewis, Greenberg Traurig Law Firm, Litigation Attorney
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Jason Lewis is a Shareholder practicing out of Greenberg Traurig’s Dallas and Houston offices. Jason, a former Enforcement Attorney with the U.S. Securities & Exchange Commission, is a trial attorney who handles civil and criminal regulatory investigations and litigation matters for corporations and individuals across the country and internationally. Jason’s practice focuses on SEC enforcement, government investigations, conducting internal corporate investigations, White Collar criminal defense, securities litigation, crisis management, and business disputes and...

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