They set limit on penalties and say victims should benefit.
The Supreme Court upheld the Securities and Exchange Commission’s ability to recover ill-gotten gains from financial fraudsters, but said there were limits on how far the government could go.
In an 8-1 opinion authored by Justice Sonia Sotomayor, the Court on Monday said the SEC’s attempted recoveries could not exceed a wrongdoer’s net profits and should be done with an aim of benefitting investors who were the victims of an alleged fraud.
Justice Clarence Thomas, the only dissenter from the majority, wrote that the SEC has no legal authority to seize any profits from the targets of its civil enforcement lawsuits. The Supreme Court’s decision returns the case to the lower courts to ensure that the fine complies with the limits outlined by the justices.
As the Lord Leads, Pray with Us…
- For Securities and Exchange Commission investigators as they uncover fraudulent investment schemes and bring the offending groups to justice.
- For victims of the schemes who will be able to recover some, but probably not all, of the misappropriated investment money.
Sources: Wall Street Journal, The Hill
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