Blog

SEC DISGORGEMENT ORDERS AND DECLARATORY RELIEF ARE TIME-BARRED, THE ELEVENTH CIRCUIT HOLDS

  • May 27th, 2016
  • Russell Weigel
  • Comments Off on SEC DISGORGEMENT ORDERS AND DECLARATORY RELIEF ARE TIME-BARRED, THE ELEVENTH CIRCUIT HOLDS

In a first-of-its-kind case on the issues of disgorgement and declaratory relief, an appellate court upheld a federal district court decision throwing out a SEC enforcement case. The Eleventh Circuit Court of Appeals affirmed the district court on the grounds that the declaratory relief sought by the SEC is punitive in nature, and disgorgement of purported ill-gotten gains is a civil forfeiture. Because disgorgement is a forfeiture, and declaratory relief is punitive, these remedies are subject to the five-year statute of limitation. Our managing member Russell C. Weigel, III represented defendant Ricky L. Stokes before the District Court and co-counseled on the appeal. Mr. Weigel also argued the disgorgement and forfeiture issues for all of the defendants before the District Court at the underlying summary judgment hearing.

This decision could affect all federal agencies whose enforcement cases are subject to the general federal government statute of limitations applicable to civil cases.

SEC v. Barry J. Graham, Fred Davis Clark, Jr. a.k.a Dave Clark, Cristal R. Coleman a.k.a Cristal Clark, David W. Schwarz, and Ricky L. Stokes, Case No. 14-13562 (11th Cir. 2016).

Read the opinion here:

2016-05-26 Eleventh Circuit Opinion

 

Comments are closed.