Document ID: ./input/supremecourt_opinions/opinions/19pdf/18-1501_8n5a.pdf
Page Number: 5

2 

LIU v. SEC 

Opinion of the Court 

as amended, 15 U. S. C. §78a et seq., and to punish securi-
ties fraud through administrative and civil proceedings.  In 
administrative proceedings, the SEC can seek limited civil
penalties  and  “disgorgement.”    See  §77h–1(e)  (“In  any 
cease-and-desist proceeding under subsection (a), the Com-
mission may enter an order requiring accounting and dis-
gorgement”);  see  also  §77h–1(g)  (“Authority  to  impose
money penalties”).  In civil actions, the SEC can seek civil 
penalties  and  “equitable  relief.”    See,  e.g.,  §78u(d)(5)  (“In
any action or proceeding brought or instituted by the Com-
mission under any provision of the securities laws, . . .  any 
Federal court may grant . . . any equitable relief that may
be  appropriate  or  necessary  for  the  benefit  of  investors”);
see also §78u(d)(3) (“Money penalties in civil actions” (quo-
tation modified)).

Congress did not define what falls under the umbrella of 
“equitable relief.”  Thus, courts have had to consider which 
remedies the SEC may impose as part of its §78u(d)(5) pow-
ers. 
  Starting with SEC v. Texas Gulf Sulphur Co., 446 F. 2d 
1301 (CA2 1971), courts determined that the SEC had au-
thority  to  obtain  what  it  called  “restitution,”  and  what  in 
substance amounted to “profits”  that “merely  depriv[e ]” a
defendant  of  “the  gains  of  . . .  wrongful  conduct.”    Id.,  at 
1307–1308.  Over the years, the SEC has continued to re-
quest this remedy, later referred to as “disgorgement,”1 and 

—————— 

1 Courts have noted the relatively recent vintage of the term “disgorge-
ment.”  See,  e.g.,  SEC  v.  Cavanaugh,  445  F. 3d  105,  116,  n.  24  (CA2 
2006).  The dissent contends that this recency in terminology alone re-
moves  disgorgement  from  the  class  of  traditional  equitable  remedies, 
post, at 4 (opinion of THOMAS, J.), despite seeming to recognize disgorge-
ment’s parallels to restitution-based awards well within that class, post, 
at 4–5.  It is no surprise that the dissent notes such parallels, given this 
Court’s  acknowledgment  that  “disgorgement  of  improper  profits”  is  “a 
remedy only for restitution” that is “traditionally considered . . . equita-
ble.”  Tull v. United States, 481 U. S. 412, 424 (1987); see also infra, at 7.