Monday, July 23, 2018

Courts Continue to Rein In the SEC

In what might be a boon for financial professionals, the courts continue to impose restrictions on the enforcement efforts of the SEC. In SEC vs. Cohen, Judge Nicholas Garaufis of the US District Court in Brooklyn dismissed the SEC's complaint entirely on statute of limitations grounds.

Specifically, the Courts are rejecting the SEC's punitive enforcement approach, holding that under the U.S. Supreme Court’s decision in SEC v. Kokesh, the SEC’s claims were barred by the applicable five-year statute of limitations set forth in 28 U.S.C. § 2462. Although Kokesh addressed disgorgement and not injunctive relief, the Cohen court held that the reasoning of Kokesh supported a conclusion that the demand for injunctive relief was similarly time barred, because the requested injunction would operate, at least in part, as a penalty.

Read more details about the decision, and how the SEC might navigate this situation, in this article from The National Law Review.

The attorneys at Sallah Astarita & Cox include veteran securities litigators and former SEC Enforcement Attorneys. We have decades of experience in securities litigation matters, including the defense of enforcement actions. We represent investors, financial professionals and investment firms, nationwide. For more information call 212-509-6544 or send an email to The Securities Law Blog.
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