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Kokesh v. Sec

• 2016 • 137 S. Ct. 1635 • Roberts Court
The U.S. Supreme Court case Kokesh v. SEC in 2016 revolved around the issue of whether the five-year statute of limitations, as stated under 28 U.S.C §2462, applies to claims for "disgorgement" imposed by the Securities and Exchange Commission (SEC). Disgorgement is a remedy used by the SEC to recover ill-gotten gains from those who violate securities laws. Charles R. Kokesh was ordered by a district court to pay $34.9 million in disgorgement for violating various securities laws over several...Open Case
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Chief Roberts Court
Term: 2016
Docket: 16-529
137 S. Ct. 1635
198 L. Ed. 2d 86
2017 U.S. LEXIS 3557
Argued: Apr 18, 2017

Kokesh v. Sec

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Questions presented:
SCOTUS Records

16-529 KOKESH V. SEC DECISION BELOW: 834 F.3d 1158 CERT. GRANTED 1/13/2017 QUESTION PRESENTED: Under 28 U.S.C. § 2462, any "action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued." The question presented is: Does the five-year statute of limitations in 28 U.S.C. § 2462 apply to claims for "disgorgement"? LOWER COURT CASE NUMBER: 15-2087

Opinion Summary
AI Abstract

The U.S. Supreme Court case Kokesh v. SEC in 2016 revolved around the issue of whether the five-year statute of limitations, as stated under 28 U.S.C §2462, applies to claims for "disgorgement" imposed by the Securities and Exchange Commission (SEC). Disgorgement is a remedy used by the SEC to recover ill-gotten gains from those who violate securities laws. Charles R. Kokesh was ordered by a district court to pay $34.9 million in disgorgement for violating various securities laws over several years beyond this five-year limit. Kokesh appealed against this decision arguing that disgorgements were penalties and thus subject to a five-year statute of limitations under federal law. The Supreme Court unanimously agreed with him, ruling that because such sanctions go beyond mere compensation and are intended to punish offenders and deter others from offending, they do indeed constitute penalties within the meaning of §2462. This landmark judgment significantly limited how far back into an offender's past violations regulators can reach when seeking financial punishments or remedies like disgorgements.

Dissent Summary
AI Abstract

In the dissenting opinion for Kokesh v. SEC, Justice Sonia Sotomayor argued that the majority's decision to classify disgorgement as a penalty was incorrect and could potentially undermine future enforcement of securities laws. She contended that disgorgement is not punitive but rather remedial because it merely deprives wrongdoers of their ill-gotten gains and returns them to those who were harmed. According to her, this does not fit into the traditional definition of a penalty which aims at punishing an offense against public justice rather than compensating victims. Furthermore, she expressed concern about how this ruling might affect other areas where courts have ordered disgorgements such as antitrust or consumer protection cases.

Opinion written by Justice SSotomayor
Decided: Jun 05, 2017
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