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Congress Seeks to Amend Securities Laws on Disgorgement | Kramer Levin Naftalis & Frankel LLP

To embed, copy and paste the code into your website or blog: The House of Representatives (on Dec. 8, 2020) and the Senate (on Dec. 11, 2020) passed the William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021, H.R. 6395 (the NDAA). While the bill’s principal focus is on defense appropriations, it includes as Section 6501, titled “Investigations and Prosecution of Offenses for Violations of the Securities Laws,” significant amendments to Section 21(d) of the Securities Exchange Act of 1934. First, the proposed amendments would grant the Securities and Exchange Commission (SEC) express statutory authority to pursue disgorgement in civil enforcement actions in federal court. Second, the bill doubles the statute of limitations applied to disgorgement actions for all cases involving fraud or scienter from five years to 10 years (leaving a five-year statute for disgorgement in non-fraud cases). The bill also sets a 10-year statute of limitations

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