Published Articles

Joel Kurtzberg, Brad Bondi, Adam Mintz, and Grace McAllister Publish “DC Circuit Holds that Kokesh Does Not Preclude Imposition of Industry Bars” in INSIGHTS: The Corporate & Securities Law Advisor

Date: 04/19/21

In Kokesh v. SEC, 137 S. Ct. 1635 (2017), the Supreme Court of the United States held that disgorgement is a penalty and, therefore, any attempt by the U.S. Securities and Exchange Commission (“SEC” or “Commission”) to seek disgorgement is subject to 28 U.S.C. §2462, which sets forth a five-year statute of limitations that applies to the enforcement of penalties. After Kokesh, there was discussion that the decision would curtail or possibly eliminate the SEC’s ability to use disgorgement and other equitable remedies, such as industry bars. In Saad v. SEC, 2020 WL 6533465 (D.C. Cir. Nov. 6, 2020), the Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) held that Kokesh does not restrict the SEC’s ability to impose industry bars. With this decision, the D.C. Circuit joins several circuits that have refused to apply Kokesh beyond §2462.

In an article for the February 2021 issue of INSIGHTS: The Corporate & Securities Law Advisor, partners Joel Kurtzberg and Brad Bondi, along with counsel Adam Mintz and associate Grace McAllister, discuss the D.C. Circuit’s recent decision in Saad v. SEC, which addresses for the first time, under Kokesh’s reasoning, whether industry bars are punitive and would constitute an impermissible sanction under Section 19(e)(2) of the Securities Exchange Act of 1934.  The court held that Kokesh does not restrict the SEC’s ability to impose industry bars.

INSIGHTS-DC Circuit Holds that Kokesh Does Not Preclude Imposition of Industry Bars.pdf (pdf | 4.79 MB )