Targets Could Benefit From Ruling Applying Time Limit to Disgorgement Claims


MoneyA federal appeals court’s ruling earlier this year that government efforts to recoup ill-gotten-gains are subject to a five-year limitations period could benefit the targets of enforcement actions, argue three WilmerHale attorneys.

The U.S. Court of Appeals for the 11th Circuit ruled in May that disgorgement claims – rather than just civil monetary penalties – are subject to the five-year statute of limitations.  That "could significantly decrease the financial exposure faced by targets of SEC enforcement actions," write Matthew T. Martens, Benjamin Neaderland and Jared B. Cohen in their BNA Insight.

A similar case involving the SEC is now pending in the D.C. Circuit.

The authors argue the decision could also provide a defense against disgorgement claims in actions brought by the Consumer Financial Protection Bureau (CFPB).

Read the full Insight here.