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Mon Jun 22, 2020, 12:41 PM

Supreme Court upholds SEC's power to take illegal profits from Orange County couple

Source: Los Angeles Times

WASHINGTON — The Supreme Court ruled Monday against an Orange County couple accused of running a $27-million stock scheme and said the government can take back all of their ill-gotten gains.
The 8-1 decision is a victory for the Securities and Exchange Commission and its power to “disgorge” money from those who obtained it illegally.

The couple, Charles Liu and Xin Wang, were accused of luring investors to send them money for a cancer treatment center that was never built, and then spending much of the proceeds for their own benefit.

The SEC demanded they “disgorge” the entire $27 million that was collected, and it won in the lower courts.

The Supreme Court on Monday affirmed the SEC’s power to seek disgorgement of ill-gotten gains, but told the 9th Circuit Court to reconsider the amount. The couple said they spent some of the money for legitimate business expenses.

Read more: https://www.latimes.com/politics/story/2020-06-22/supreme-court-sec-illegal-profits-orange-county-couple



The one dissenter, unsurprisingly, was Clarence Thomas.

21 replies, 2480 views

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Arrow 21 replies Author Time Post
Reply Supreme Court upholds SEC's power to take illegal profits from Orange County couple (Original post)
alp227 Jun 22 OP
machoneman Jun 22 #1
usaf-vet Jun 22 #3
CloudWatcher Jun 22 #16
DENVERPOPS Jun 22 #20
mahatmakanejeeves Jun 22 #2
KS Toronado Jun 22 #4
dem4evah Jun 22 #5
guillaumeb Jun 22 #7
ProfessorGAC Jun 22 #8
3Hotdogs Jun 22 #10
aggiesal Jun 22 #21
guillaumeb Jun 22 #6
muriel_volestrangler Jun 22 #9
guillaumeb Jun 22 #13
ripcord Jun 22 #19
OnlinePoker Jun 22 #11
Larry Moecurley Jun 22 #12
melm00se Jun 22 #14
samsingh Jun 22 #15
RhodeIslandOne Jun 22 #17
iluvtennis Jun 22 #18

Response to alp227 (Original post)

Mon Jun 22, 2020, 12:51 PM

1. How about all the millions Trump's many failed businesses took from unsuspecting citizens?

Steaks?
Inflated condo prices?
Failed university?

Gosh, the list goes on and on.............

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Response to machoneman (Reply #1)

Mon Jun 22, 2020, 12:59 PM

3. How about all the Trump grifters who use the presidency to steal millions from taxpayer.

I don't have enough time to list all of the things they have stolen.
So let me say one thing they haven't yet stolen. The White paint on the White House.

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Response to machoneman (Reply #1)

Mon Jun 22, 2020, 02:06 PM

16. SEC

If the SEC is involved, it means the business was publicly owned. The rules are a lot stricter for businesses that try and openly sell stock.

Not strict enough of course ... but privately owned companies are even worse.

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Response to CloudWatcher (Reply #16)

Mon Jun 22, 2020, 03:57 PM

20. And don't forget

All the insider Senators and House members that used a top secret briefing to react to what was coming in the stock market.....
Especially the twat senator who immediately sold tens of millions in stock holdings.......not to mention her husband who is chairman of the board of the Dow Jones.......

Laws, rules, and Justice are only to be enforced on the lower 99%..........

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Response to alp227 (Original post)

Mon Jun 22, 2020, 12:57 PM

2. LIU ET AL. v. SECURITIES AND EXCHANGE COMMISSION

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Response to alp227 (Original post)

Mon Jun 22, 2020, 01:00 PM

4. SEC needs to give the money back to the people who were scammed

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Response to alp227 (Original post)

Mon Jun 22, 2020, 01:03 PM

5. Lonnnnnng time lurker, first time poster....

 

Last edited Mon Jun 22, 2020, 01:48 PM - Edit history (1)

And lifelong die hard Cubs fan. So I thought it might be appropriate to comment just behind another Cubs fan. Anyway, words are hard to come by with regard to my utter disgust for Clarence Thomas. As bad as Kavanaugh and Alito are, even they had the decency to vote and do the right thing here. But Clarence? No, he just does nothing as usual and dissents.

When we get Joe in the WH, I sincerely hope that IF RGB decides to retire, we replace her with a woman. (Preferably a woman of color) But I would LOVE to see Thomas go too. Yeah, I know it would be a bare knuckle brawl to get 2 SCOTUS picks passed, but if we can get the Senate then maybe it's possible. I'd like to see Garland replace Thomas. At least Roberts and Gorsuch have shown glimpses of being human lately. Kavanaugh, Alito and Thomas are a lost cause IMHO.

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Response to dem4evah (Reply #5)

Mon Jun 22, 2020, 01:05 PM

7. Congratulations.

The first post is the hardest.

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Response to dem4evah (Reply #5)

Mon Jun 22, 2020, 01:15 PM

8. Welcome To DU

Officially, that is.
Cubs fan here, too.
First game my dad took me too was 1962.
I have one piece of memorabilia. A baseball, signed at 3 different times, '66, '67, & 69, by Billy Williams, Ernie Banks, & Ron Santo. There was a picture of me & Billy while I was holding the ball. Got lost when we cleaned out my parents' home.
But, I've still got the ball!
Good first post!

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Response to dem4evah (Reply #5)

Mon Jun 22, 2020, 01:22 PM

10. I doubt your wish will come true.

McTurtle will explain how it isn't right to have a president's nomination approved with three years left to go in Biden's term.

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Response to dem4evah (Reply #5)

Mon Jun 22, 2020, 04:28 PM

21. Welcome to DU. Don't be a stranger. n/t

<--- Cubs Fan too! (Life long)

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Response to alp227 (Original post)

Mon Jun 22, 2020, 01:04 PM

6. "Legitimate business expenses"?

What legitimate expenses are involved in a criminal scheme?

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Response to guillaumeb (Reply #6)

Mon Jun 22, 2020, 01:21 PM

9. It appears they think some money was spent on genuine equipment

Although it is not necessary to set forth more guidance
addressing the various circumstances where a defendant’s
expenses might be considered wholly fraudulent, it suffices
to note that some expenses from petitioners’ scheme went
toward lease payments and cancer-treatment equipment.
Such items arguably have value independent of fueling a
fraudulent scheme. We leave it to the lower court to examine
whether including those expenses in a profits-based
remedy is consistent with the equitable principles underlying §78u(d)(5).

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Response to muriel_volestrangler (Reply #9)

Mon Jun 22, 2020, 01:36 PM

13. Thank you.

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Response to muriel_volestrangler (Reply #9)

Mon Jun 22, 2020, 03:49 PM

19. Hopefully the lower courts will stand firm

It sounds like they spent that money to have props rather than these being legitimate expenses.

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Response to alp227 (Original post)

Mon Jun 22, 2020, 01:23 PM

11. Though, in his dissent, he makes a very good point

...the award should be used to compensate victims, not to enrich the Government....The money ordered to be paid as disgorgement in no sense belongs to the Government, and the majority cites no authority allowing a Government agency to keep equitable relief for a wrong done to a third party. Requiring the SEC to only “generally” compensate victims, ante, at 15, is inconsistent with traditional equitable principles.

Worse still from a practical standpoint, the majority provides almost no guidance to the lower courts about how to resolve this question on remand. Even assuming that disgorgement is “equitable relief” for purposes of §78u(d)(5) and that the Government may sometimes keep the money, the Court should at least do more to identify the circumstances in which the Government may keep the money. In-stead, the Court asks lower courts to improvise a solution.If past is prologue, this uncertainty is sure to create opportunities for the SEC to continue exercising unlawful power.

----------------------

His dissent is in what is fair and equitable compensation for the victims, not the government, which the majority failed to address.

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Response to alp227 (Original post)

Mon Jun 22, 2020, 01:31 PM

12. "Disgorge"?

 

Sounds like induced vomiting!

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Response to alp227 (Original post)

Mon Jun 22, 2020, 01:38 PM

14. Broad brush on Thomas

Why he voted against this is in the 1st couple of sentences of his dissent:

The Court correctly declines to affirm the Ninth Circuit’s decision upholding the District Court’s disgorgement order, but I disagree with the Court’s decision to vacate and remand for the lower courts to “limi[t]” the disgorgement award. Disgorgement can never be awarded under 15 U. S. C. §78u(d)(5). That statute authorizes the Securities and Exchange Commission (SEC) to seek only “equitable relief that may be appropriate or necessary for the benefit of investors,” and disgorgement is not a traditional equitable remedy.

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Response to alp227 (Original post)

Mon Jun 22, 2020, 01:45 PM

15. what is wrong with Clarence thomas

he is truly evil.

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Response to alp227 (Original post)

Mon Jun 22, 2020, 02:19 PM

17. How about Kelly Fluffer and her hubby

Oh that's right, the "Senate Ethics Committee" gave them a pass.

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Response to alp227 (Original post)

Mon Jun 22, 2020, 02:26 PM

18. Does the 27 million scammed from the investors go back to the investors - I bet not. Sad. nt

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