That said, equitable disgorgement is worth saving for several reasons: it cannot be entirely effectively replaced by administrative disgorgement, it embodies the intuitive notion that wrongdoers should not profit from their wrongdoing, and it fulfills the vital need to compensate victims.
Part II specifically examines disgorgement's origins and its historical development.
From Texas Gulf Sulphur through Kokesh, the SEC routinely pursued disgorgement as a standard remedy in civil enforcement cases.
(24) Part IV discusses the future of disgorgement and the potential challenges it will face in the future.
The Tenth Circuit rejected that argument, holding that disgorgement is a remedy rather than a penalty, explaining that, "[p]roperly applied, the disgorgement remedy does not inflict punishment." (13) Although the Tenth Circuit agreed that "disgorgement serves a deterrent purpose," the court further explained that "it does so only by depriving the wrongdoer of the benefits of wrongdoing." (14)
(15) Importantly, the Court went out of its way to note that disgorgement is a relatively new penalty that was created by judicial fiat at the SEC's behest:
Restitution and disgorgement
of the Nuclear Waste Fund would result in a total breach of the standard contract established under the NWPA.
She added that "SEC disgorgement is imposed for punitive purposes," not just to put the defendant back in the same financial position he or she was in before the fraud occurred.
The ruling is a win for Wall Street, whose advocates argued that placing disgorgement into a different category, as urged by the government, would give the commission too much power to go after "stale" claims.
(70) Justice Thomas then noted that, both in water disputes and in contract law, disgorgement was an "extraordinary remedy" for three reasons.
(83) In contrast, disgorgement for breach of contract is a peripheral equitable remedy.
measure of the disgorgement
remedy is the ill-gotten gain from the