Our Website Uses Cookies 

We and the third parties that provide content, functionality, or business services on our website may use cookies to collect information about your browsing activities in order to provide you with more relevant content and promotional materials, on and off the website, and help us understand your interests and improve the website.

For more information, please contact us or consult our Privacy Notice.

Your binder contains too many pages, the maximum is 40.

We are unable to add this page to your binder, please try again later.

This page has been added to your binder.

Justices' Liu Ruling Creates More Questions Than Answers

June 23, 2020, Law360

Gerald Hodgkins is quoted in Law360 regarding the U.S. Supreme Court’s opinion in Liu v. SEC, which determined that the SEC can obtain disgorgement through enforcement actions in district courts as a form of equitable relief. Mr. Hodgkins says the regulator's current practice of seeking a tippee's profits from a tipper in insider trading cases likely won't fly anymore, since Monday's opinion suggests that “requiring one party to pay back the ill-gotten gains of another amounts to a penalty.

He adds that the SEC can still try to prove a tipper and tippee were indeed engaging in "concerted wrongdoing," such as when a tipper provides insider information to a family member or receives a kickback from a tippee. “That said, [given] the court's use of 'remote, unrelated tipper-tippee arrangements' as the example it provided for when collective liability would not be appropriate, it seems unlikely that traditional tipper-tippee cases would meet the standard articulated by the court for when one wrongdoer can be held responsible for the profits of another,” he says.

Share this article: