SEC v. Graham

The SEC waited more than five years to commence an action for declaratory relief, injunctive relief, and disgorgement against defendants, who allegedly violated federal securities law by selling unregistered securities. Defendants raised the five-year statute of limitations as an affirmative defense in their motions for summary judgment. The district court dismissed the case based on the statute of limitations set out in 28 U.S.C. 2462. Section 2462, with few exceptions, bars the government from bringing suit to enforce “any civil fine, penalty, or forfeiture” after five years from when the claim first accrued. The court concluded that the SEC is time-barred from proceeding with its claims for declaratory relief and disgorgement because, under the plain meaning of section 2462, these remedies are a penalty and a forfeiture, respectively. But, because an injunction is not a penalty under section 2462, the court remanded for further proceedings on that remedy. Accordingly, the court affirmed in part, reversed in part, and remanded. View "SEC v. Graham" on Justia Law