Peter Altman Quoted in Regulatory Compliance Watch on Ramifications of Kokesh Decision on SEC

Regulatory Compliance Watch has quoted Akin Gump senior counsel Peter Altman in the article “Options open to the SEC following High Court enforcement disgorgement loss,” which looks at a recent Supreme Court decision that places a five-year statute of limitations on disgorgement assessed by the Securities and Exchange Commission.

The unanimous ruling in Kokesh v. SEC, according to Altman, “is a really big deal.” Formerly of the SEC’s Division of Enforcement, Altman said to look for the agency to push defendants to sign a “tolling agreement,” which basically stops the statutory clock. He said the commission could pressure parties by stating that if you want full credit for cooperating, you’d better sign a tolling agreement.

Other ramifications of the ruling, Altman said, include the Commodity Futures Trading Commission possibly being challenged on its own disgorgement practices or the IRS declaring disgorgement as not tax deductible now that it’s seen as being punitive. Additionally, he continued, insurance companies might exclude disgorgement in policies.

The so-called elephant in the room, according to Altman, is a footnote in Justice Sonia Sotomayor’s decision suggesting that future challenges could succeed in questioning the SEC’s ability to seek any disgorgement, regardless of when.

To read an Akin Gump client alert on the Kokesh decision that was co-authored by Altman, please click here.