In a much anticipated decision, the U.S. Supreme Court held that the Securities and Exchange Commission (SEC) can obtain disgorgement as a form of “equitable relief,” but it can do so only to the extent the award “does not exceed a wrongdoer’s net profits and is awarded for victims.” Our colleagues have written separately about the effect of Liu v. SEC on the SEC, but the decision will have wide-ranging implications for other federal agency enforcement actions, including those brought by the Federal Trade Commission (FTC).
The FTC historically has asserted a broad view of its authority to obtain monetary relief in federal court. Although many are promoting Liu as a win for the government, as described in more detail below, it will impose serious limitations on the scope of equitable relief the FTC can obtain and will likely curtail the FTC’s restitution program considerably.
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