Liu v. SEC
View Official PDFBelow are plain-language sections to help you understand what the Court decided in Liu v. SEC and why it matters. Quotes are taken from the syllabus (the Court’s short summary at the start of the opinion).
Summary
A short, plain-English overview of Liu v. SEC.
The Supreme Court addressed whether the SEC's disgorgement orders qualify as equitable relief under 15 U.S.C. § 78u(d)(5). The Court determined that disgorgement awards that do not exceed a wrongdoer's net profits and are awarded for victims are permissible as equitable relief. The case was vacated and remanded for further proceedings consistent with this interpretation.
Holding
The single most important “bottom line” of what the Court decided in Liu v. SEC.
The Court held that a disgorgement award that does not exceed a wrongdoer's net profits and is awarded for victims is 'equitable relief' permissible under § 78u(d)(5).
Constitutional Concepts
These are the Constitution-related themes that appear in Liu v. SEC. Click a concept to see other cases that involve the same idea.
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Why Remedies and Relief is relevant to Liu v. SEC
The case primarily deals with the scope of equitable relief that the SEC can seek, specifically whether disgorgement qualifies as such under the statutory framework.
Syllabus excerpt (verbatim)Held: A disgorgement award that does not exceed a wrongdoer's net profits and is awarded for victims is 'equitable relief' permissible under § 78u(d)(5).
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Why Judicial Review is relevant to Liu v. SEC
The Court is interpreting the statutory provision to determine the limits of judicially ordered disgorgement, which involves reviewing and potentially invalidating the SEC's interpretation.
Syllabus excerpt (verbatim)Congress incorporated these longstanding equitable principles into § 78u(d)(5), but courts have occasionally awarded disgorgement in ways that test the bounds of equity practice.
Key Quotes
Short excerpts from the syllabus in Liu v. SEC that support the summary and concepts above.
A disgorgement award that does not exceed a wrongdoer's net profits and is awarded for victims is 'equitable relief' permissible under § 78u(d)(5).
Equity practice has long authorized courts to strip wrongdoers of their ill-gotten gains.
Courts must deduct legitimate expenses before awarding disgorgement under § 78u(d)(5).
