But the justices rejected a request that they rule the agency can never sue for disgorgement of profits obtained by fraud.
The Supreme Court ruled on Monday that the Securities and Exchange Commission may ask courts to order disgorgement of ill-gotten profits, preserving a tool that has allowed it to recover billions of dollars. But the justices said courts should place significant limits on what kinds of disgorgements are permissible.
Three years ago, the Supreme Court cast doubt on whether disgorgement was among the remedies the agency could seek in civil lawsuits. But the 8-to-1 decision on Monday said a reference in a federal law to “equitable relief” was enough to allow the remedy with appropriate limits.
The case arose from an investment scheme promoted by a married couple, Charles Liu and Xin Wang. They raised about $27 million from Chinese investors under a federal program that allows foreign citizens to obtain visas in exchange for investments in projects that create jobs in the United States.
The participants were told that the bulk of their investments would be used to build and operate a cancer treatment center in California. A trial judge found that the couple had misappropriated much of the money.
