After a Presidential veto and Congressional override, the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 (NDAA) was enacted on January 1, 2021. Buried in Section LXV (Miscellaneous) within the NDAA’s 1,480 pages is a notable expansion of the SEC’s ability to seek disgorgement of ill-gotten gains for violations of the federal securities laws. Although the SEC has long sought disgorgement as a form of relief, the remedy had not been expressly authorized by statute, and two recent Supreme Court decisions had limited its scope. The NDAA is Congress’ clear response to those limitations: federal courts can now order disgorgement – and other equitable remedies – and in certain cases can do so for a period of up to ten years from the latest date of a violation. Particularly important for non‑U.S. fund managers, the statute of limitations for disgorgement and equitable remedies is now tolled for any periods spent abroad. Finally, the amendments appear to cover both new and pending investigations before the SEC. In a guest article, Ann Sultan, Margot Laporte and Paul Leder, attorneys at Miller & Chevalier, offer five key takeaways from the new statute. See “Supreme Court Affirms in SEC v. Liu That the Commission Can Seek Disgorgement Awards – With Limitations
” (Jul. 28, 2020).