IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF FLORIDA

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

JUSTIN W. KEENER D/B/A JMJ FINANCIAL, 

Defendant.

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No. 20-cv-21254 

Hon. Beth Bloom 

PLAINTIFF SECURITIES AND EXCHANGE COMMISSION’S SUR-SURREPLY TO DEFENDANT’S OPPOSITION TO THE SEC’S MOTION FOR 

REMEDIES

Case 1:20-cv-21254-BB Document 137 Entered on FLSD Docket 05/20/2022 Page 1 of 3
Defendant’s sur-reply is based on the false premise that the SEC contends that Section 

21(d)(7) of the Securities Exchange Act of 1934 overruled SEC v. Liu, 140 S.Ct. 1936 (2020). See 15 

U.S.C. §§ 78u(d)(5) & (7); DE 132 at 2-3. The SEC has never even suggested this. Liu interpreted the 

phrase “for the benefit of investors” in Section 21(d)(5) as a “limitation[]” or “restrict[ion]” on a 

court’s equitable authority to disburse collected disgorgement amounts. 140 S.Ct. at 1947-49. The 

SEC’s reply brief merely notes that Section 21(d)(7) omits this exact language and that the Court 

thus has “greater flexibility” in determining how disgorgement should be distributed. DE 129 at 4; 

see also SEC v. Almagarby, 2021 WL 4461831 at *3 (S.D. Fla. 2021) (Liu does not require the SEC to 

identify victims before disgorgement is ordered). Nevertheless, as it has consistently stated, the SEC

will attempt to make a distribution to investors in this case. The SEC is not requesting that the Court 

order disgorged funds be sent to the Treasury—which was the practice that troubled the Court in 

Liu—instead of to “known victims.” 140 S.Ct. at 1946-48.

Although the SEC’s disgorgement request is consistent with Liu, Defendant is mistaken to 

argue that applying Section 21(d)(7) to this case would raise any “serious constitutional question.”

See DE 132 at 2-3. The omission of language that Liu found “restricts” a court’s equitable authority 

does not transform disgorgement into penal legislation. See id., 140 S. Ct. at 1947. Regardless, the 

“congressional power to make valid statutes retroactively applicable to pending cases has often been 

recognized.” Bank Markazi v. Peterson, 578 U.S. 212, 228 (2016). 

Defendant also asserts that “no court in the country has held that Section 21(d)(7) impacts 

the interpretation of Liu in any way.” DE 132 at 1-2. But the SEC’s claim for disgorgement in the 

cases Defendant cites met Liu’s interpretation of Section 21(d)(5), so there was no need for the 

courts to address Section 21(d)(7). See, e.g., SEC v. Blackburn, 15 F.4th 676, 681-82, n. 4 (5th Cir. 

2021). Similarly, the Court does not need to reach that question here because the SEC’s 

Case 1:20-cv-21254-BB Document 137 Entered on FLSD Docket 05/20/2022 Page 2 of 3
commitment to distributing the disgorgement award to harmed investors is consistent with both Liu

and Section 21(d)(7). 

DATE: May 19, 2022 Respectfully submitted, 

 

 By: 

 __________________________ 

Antony Richard Petrilla 

 Joshua E. Braunstein 

Attorneys for Plaintiff

SECURITIES AND EXCHANGE COMMISSION

100 F Street NE 

Washington, DC 20549

Telephone: (202) 551-4544

Petrillaa@sec.gov

ATTORNEYS FOR PLAINTIFF 

SECURITIES AND EXCHANGE 

COMMISSION 

 

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