A guest post from Gibson Dunn attorneys Barry Goldsmith, Helgi Walker, M. Jonathan Seibald, and Brian Richman.
On December 11, 2020, Congress fulfilled its constitutional obligation “to provide for the common defense,” passing for the 60th consecutive year the National Defense Authorization Act (“NDAA”), H.R. 6395. Buried on page 1,238 of this $740.5 billion military spending bill is an amendment to the Securities Exchange Act of 1934. That amendment gives the Securities and Exchange Commission, for the first time in its history, explicit statutory authority to seek disgorgement in federal district court. It also doubles the current statute of limitations for disgorgement claims in certain classes of cases. The amendment appears to be a direct response to recent Supreme Court decisions limiting the SEC’s authority.