Eleventh Circuit Rules Disgorgement Subject To Five-Year

On May 26, 2016, a three-judge panel of the United States Court of Appeals for the Eleventh Circuit issued SEC v. Graham,¹ a significant decision that, at least in the Eleventh Circuit, limits the ability of the Securities and Exchange Commission ("SEC" or "Commission") to obtain disgorgement of ill-gotten gains in civil injunctive actions filed more than five years after the allegedly violative conduct. In so doing, the Eleventh Circuit ruled that 28 U.S.C. § 2462—the federal catch-all five-year statute of limitations—applies to the equitable remedy of disgorgement, because disgorgement is nothing other than "forfeiture," which is expressly covered by Section 2462. Graham comes after the Supreme Court's 2013 decision in Gabelli v. SEC where the Court declined to consider whether claims for disgorgement were subject to Section 2462 but signaled that it was generally in favor of limiting the government's ability to obtain relief for conduct long in the past, noting that