Ahead of Supreme Court oral arguments, Kennedy and Warner urge Congress to protect investors against fraudsters
Mar 03 2020
Supreme Court scheduled to hear oral arguments today in Liu v. Securities and Exchange Commission
WASHINGTON — Sens. John Kennedy (R-La.) and Mark R. Warner (D-Va.), members of the Senate Banking Committee, released a statement today ahead of Supreme Court arguments in Liu v. SEC, a case challenging the Securities and Exchange Commission’s (SEC) enforcement powers to seek disgorgement on behalf of defrauded investors.
“Today’s argument in Liu v. SEC highlights the critical importance of affirming the SEC’s ability to protect investors through its disgorgement authority. Disgorgement authority is an essential enforcement tool that deters violations of our securities laws, protects Main Street investors, and helps compensate hardworking Americans who are victims of financial scams. Since the Court’s 2017 decision in Kokesh v. SEC, the SEC has forgone an estimated $1.1 billion in proceeds on behalf of harmed investors—a number that will only grow if the Supreme Court sides with the petitioners in this case—putting more money in the pockets of scammers and fraudsters while leaving ripped-off investors holding the bag. While we strongly believe that the SEC has the legal authority to seek disgorgement in civil actions, uncertainty from this case underscores the importance of congressional action to better protect harmed investors. In the Senate, we have introduced bipartisan legislation that would affirm the SEC’s disgorgement authority and expand its toolkit to increase financial recovery for harmed investors. The House passed similar legislation last year. We urge our colleagues in the Senate to act now by taking up this bipartisan effort,” said the senators.
Kennedy and Warner last year introduced the Securities Fraud Enforcement and Investor Compensation Act, bipartisan legislation that would give the SEC power to seek restitution for Main Street investors harmed by securities fraud. The bill would give the SEC a broader range of tools to seek compensation for investors who have lost money to Ponzi schemes and other investment scams.