Statute of Limitations May Apply to Disgorgement

In its ruling today in Kokesh v. Securities and Exchange Commission, the Supreme Court held that the SEC cannot enforce its claim for disgorgement beyond the statute of limitations. It also threw some doubt as to whether the SEC could seek disgorgement at all.

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This MIGHT have an effect on other Federal actions and state actions brought by Federal and state agencies. It could also have a substantial impact on private actions seeking disgorgement from “servicers” or “lenders” or “holders’ who collected and enforced payments from borrowers when they had no right to do so. And it might also have an effect on the disgorgement requirement in TILA rescission.

The decision was unanimous, just like Jesinoski, with the full court weighing in. But given rebellious judges around the country who favor such actions by Government agencies, there could end up being yet another conflict of laws situation where for purposes of agency actions the courts bend over backwards to allow disgorgement but for purposes of private actions they bend the other way.

One Response

  1. What a mess lender servisor as Wells Fargo threw my loan to BSI toward the end of Modification process when I called them no one answer or return my call is like already have the plan to foreclose me

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