The Investor Protection and Capital Markets Fairness Act is said to effectively overturn the U.S. Supreme Court decision in Kokesh v. SEC allowing for a 5-year statute of limitations on disgorgement and would prevent such remedies from being defined as "a civil fine, penalty or forfeiture.'"
House passage of the bill comes as the Supreme Court agreed on Nov. 1 to hear another case involving the SEC's clawback powers, which argues that the agency does not have the authority to seek disgorgement.
Nicolas Morgan, a partner at Paul Hastings in Los Angeles, told ThinkAdvisor in a Thursday email message that House passage of the bill will likely have bearing on the Supreme Court's upcoming decision in the appeal of Charles Liu and Xin Wang, which he discussed in a recent ThinkAdvisor blog post.
The SEC ordered Liu and Wang to disgorge $35 million for defrauding Chinese investors out of money that was supposed to be used for an EB-5 immigrant investor program. Under current law, Morgan wrote, "Liu and Wang argue that the SEC has no authority to seek disgorgement of that $35 million, and there is a decent chance the Supreme Court will agree."
U.S. Supreme Court (Photo: J. Scott Applewhite/AP) 
