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June 6, 2017

Stroock Special Bulletin

By: David J. Kahne

A unanimous Supreme Court ruled yesterday that the Securities and Exchange Commission’s power to recover ill-gotten profits from misconduct, also known as “disgorgement,” is subject to a five-year statute of limitations. 

This Stroock Special Bulletin provides an overview of the case, Kokesh v. Securities and Exchange Commission, No. 16-529, which the Commission commenced in federal district court in 2009, alleging that between 1995 and 2009, Kokesh, through his investment-advisor firms, misappropriated $34.9 million from development companies to whom it had provided investment advice.  The Commission also alleged that Kokesh had caused the filing of false and misleading SEC reports and proxy statements.  The Commission sought civil monetary penalties, disgorgement and an injunction barring Kokesh from future violations of securities laws. 


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