Friday, February 5, 2021
The New Year is still young, but major changes are already afoot in securities enforcement as Congress amended the Securities Exchange Act of 1934 (“Exchange Act”) on January 1, 2021. It was easy to miss these changes to the Exchange Act as they were included in the unlikeliest of places – the National Defense Authorization Act for Fiscal Year 2021 (“NDAA”), which chiefly dealt with appropriations for military activities. Specifically, Section 6501 of the NDAA (“Section 6501” or the “Amendment”) offered a number of amendments to the Exchange Act, including to the SEC’s ability to seek disgorgement and other equitable relief for violations of the federal securities laws. The Amendment appears to be a direct response from Congress to recent Supreme Court decisions