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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 <a href="https://www.investor.gov/introduction-investing/investing-basics/role-sec/laws-govern-securities-industry#secexact1934">1934 law</a> 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 <a href="https://www.congress.gov/bill/116th-congress/house-bill/6395/text?q=%7B%22search%22%3A%5B%22HR6395%22%5D%7D&amp;r=1&amp;s=2">defense reauthorization bill</a> that Congress approved in December. President Donald Trump <a href="https://www.whitehouse.gov/briefings-statements/presidential-veto-message-house-representatives-h-r-6395/">vetoed</a> that underlying bill, but lawmakers <a href="https://apnews.com/article/election-2020-donald-trump-defense-policy-bills-85656704ad9ae1f9cf202ee76d7a14fd">overrode that veto</a>, paving the way for the legislation – and its SEC language – to become law Jan. 1.

Click <a href="https://www.bakerlaw.com/alerts/congress-gives-sec-game-changing-10-year-statute-of-limitations-for-disgorgement-and-statutory-authority-to-obtain-disgorgement-in-federal-court">here</a> for an in-depth BakerHostetler analysis of the new law and SEC’s new authority.

Congress Grants SEC New Authority in Securities Fraud Cases