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January 23, 2020

Better Markets and Consumer Protection Organizations Defend Authority of the SEC to Seek Orders Forcing Scam Artists to Give Back What They Stole

Thursday, January 23, 2020
Contact: 202-618-6433,

Washington, D.C.  –  Stephen W. Hall, Legal Director and Securities Specialist for Better Markets, issued the following statement about the amicus brief filed in the Supreme Court by Better Markets, the Center for Responsible Lending, and the National Consumer Law Center, in Liu v. SEC on January 22, 2020, defending one of the most important investor protection tools available to the Securities and Exchange Commission (SEC):

“This case has the potential to make seismic changes in the SEC’s ability to protect investors and deter fraud through the disgorgement remedy.  What’s at stake is the authority of the SEC to seek orders from federal courts forcing those who prey on investors to give back what they stole.  It’s well-established in the law, it’s a matter of basic fairness and common sense, and the SEC has used this power for 50 years in its fight against securities fraud.

But the defendants in the Liu case are desperately trying to evade liability by launching a technical attack on this long-standing authority.  They claim that the Supreme Court set the stage for their defense when it decided the Kokesh case in 2017.  There, the Court held that disgorgement resembles a penalty in some respects and should, therefore, be subject to the general statutory time limits governing actions seeking fines and penalties. 

But neither the narrow holding in Kokesh nor its reasoning support the notion that the Court intended to change the nature of disgorgement fundamentally and for all purposes.  It doesn’t follow as a matter of law or sound enforcement policy.  A ruling in favor of the scammers in the Liu case will wreak havoc on the SEC’s enforcement program.  And it threatens to undermine the ability of other agencies, like the Federal Trade Commission, to use disgorgement to protect countless consumers who are scammed every day with phony promises of cancer cures, weight-loss miracles, or support for their favorite charities.

We were pleased to have two prominent and highly respected consumer protection advocates join us on the brief, the Center for Responsible Lending (CRL) and the National Consumer Law Center (NCLC).  We hope and believe that with their support, the arguments in our brief will carry that much more weight with the Court.  Better Markets also released a fact sheet today, summarizing the background of the case and listing its arguments against the defendants’ position.  We’ll be watching oral argument on March 3, 2020 and waiting anxiously for a decision thereafter.


Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit



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