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Supreme Court rules SEC can recoup money in fraud cases

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WASHINGTON – The Supreme Court on Monday preserved an important tool used by securities regulators to recoup ill-gotten gains in fraud cases.By an 8-1 vote, the justices ruled that the Securities and Exchange Commission can seek to recover the money through a process called disgorgement.

Last year, the SEC obtained $3.2 billion in repayment of profits from people who have been found to violate securities law.“The Court holds today that a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief permissible" under federal law, Justice Sonia Sotomayor wrote for the court.Justice Clarence Thomas dissented.The Supreme Court in 2017 unanimously limited the SEC’s ability to go after profits.

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