Congress voted to give the Securities and Exchange Commission (SEC) sweeping new authority to prosecute violations by creating a 10-year statute of limitations for the agency to seek disgorgement of ill-gotten gains from securities fraud.

A 1934 law had limited the SEC to seek disgorgement as a civil remedy only in administrative proceedings. But the new law allows the SEC to pursue ill-gotten gains in federal court.

The SEC provision is buried in an unrelated $740 billion defense reauthorization bill that Congress approved in December. President Donald Trump vetoed that underlying bill, but lawmakers overrode that veto, paving the way for the legislation – and its SEC language – to become law Jan. 1.

Click here for an in-depth BakerHostetler analysis of the new law and SEC’s new authority.