The U.S. Supreme Court on Monday reined in a Securities and Exchange Commission enforcement tool that the commission wanted to use to exact billions in fines for long-ago fraudulent acts.
A unanimous court ruled in Kokesh v. United States that the commission's "disgorgement" orders imposed on fraudsters amounted to a penalty and as such, must meet a five-year statute of limitations.
"This limitations period applies here if SEC disgorgement qualifies as either a fine, penalty, or forfeiture," Justice Sonia Sotomayor wrote for the court. "We hold that SEC disgorgement constitutes a penalty."
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