On May 26, 2016, the United States Court of Appeals for the Eleventh Circuit issued an important decision regarding the applicability of 28 U.S.C. § 2462, the five-year statute of limitations governing SEC enforcement actions seeking “any civil fine, penalty, or forfeiture.” In SEC v. Graham, the court expressly distinguished between remedies that are backward-looking and subject to Section 2462, such as declaratory relief and disgorgement, and those that are forward-looking and not subject to Section 2462, such as injunctions. This was the first time any circuit court applied Section 2462’s statute of limitations to declaratory relief and disgorgement. The decision is significant because it means that—at least in the Eleventh Circuit—the SEC can no longer seek disgorgement and declaratory relief going back more than five years.

DISTRICT COURT DISMISSES SEC ACTION WITH PREJUDICE -

The SEC commenced a civil action in January 2013 in the Southern District of Florida against defendants who allegedly had violated the federal securities laws between November 2004 and July 2008 by “selling condominiums that were functioning, in reality, as unregistered securities.” The SEC alleged that defendants had raised more than $300 million from approximately 1,400 investors around the country but failed to pay out the returns they had guaranteed.