The House passed on Tuesday The Investor Protection and Capital Markets Fairness Act, H.R. 4344, intended to “substantially strengthen” the Securities and Exchange Commission’s authority to recover the wrongful gains of securities law violators for investors.
The bill, introduced by Rep. Ben McAdams, D-Utah, passed by a 314-95 vote, and would codify the SEC’s authority to seek the return, or disgorgement, of ill-gotten gains and would set a 14-year statute of limitations for the agency to do so.
The Investor Protection and Capital Markets Fairness Act is said to effectively overturn the U.S. Supreme Court decision in Kokesh v. SEC allowing for a 5-year statute of limitations on disgorgement and would prevent such remedies from being defined as “a civil fine, penalty or forfeiture.’”