Liu Is Dead, Long Live Liu: Spartan and Disgorgement After the NDAA

In recent years, the U.S. Supreme Court (Court) has imposed limitations on disgorgement as a remedy for securities violations. Congress, however, has pushed back against those decisions, amending the Securities Exchange Act of 1940 to undo some of the Court’s decisions on disgorgement. A recent decision in the Middle District of Florida – SEC v. Spartan Securities Group (Spartan) – illuminates how the district courts have navigated those developments and underscores ways defendants in enforcement actions can continue to challenge or limit disgorgement. In a guest article, MoloLamken partner Eric R. Nitz recaps key Court decisions on disgorgement, explains Congress’ response to those decisions, discusses Spartan’s take on disgorgement and presents the current state of disgorgement as a remedy for securities violations. See “The SEC’s New Disgorgement Powers: Questions and Consequences” (Jun. 1, 2021). For additional analysis from Nitz, see “A Jury of Your Peers: Fifth Circuit Ruling in Jarkesy v. SEC Broadly Expands the Right to a Jury Trial for SEC Actions” (Aug. 23, 2022).

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