Texas Gulf Sulphur established the modern framework for grants of disgorgement as an ancillary equitable remedy.
The first principle can be seen in the Second Circuit's embrace of disgorgement as necessary to fully realize a key aim of the Securities Acts--the protection of consumers from future wrongdoing.
(81) In rejecting arguments from the defendants that disgorgement operates as a penalty, (82) the court embraced the view that disgorgement is remedial.
Historical Principles of Disgorgement: Remedial and Deterrent Purposes
Although the Kokesh Court deemed disgorgement to be penal in nature for the purposes of statutes of limitations, (85) courts historically embraced it as remedial after Texas Gulf Sulphur.
The Manor Nursing court reasoned that the disgorgement at issue was not remedial because "defendants in private litigation would not be required to pay defrauded purchasers the profits on the proceeds." (89) Rather, public investors bringing suit would only receive the difference between what they paid and the value of what they received.
Disgorgements are limited to "the amount by which [defendants]
to order securities violators to pay disgorgement. The SEC sometimes
relief," including disgorgement, to bolster its enforcement
measure of the disgorgement remedy is the ill-gotten gain from the
victims (similar to restitution (50)), but the SEC views disgorgement as
the SEC to order disgorgement in administrative proceedings and
