Until recently, criminal-forfeiture and civil-disgorgement actions had related goals. Generally, forfeiture sought to punish an offender by depriving him or her of ill-gotten gains, while disgorgement would restore the status quo by depriving violators the fruits of illegal conduct. In other words, although forfeiture’s aim and nature was punitive, and the equitable goal of disgorgement was to make breaking the law unprofitable, both sought to deprive the offender. This article examines the Second Circuit’s recent panel opinion in SEC v. Contorinis, which changed the landscape of who may be forced to disgorge profits realized form insider trading by blurring the equitable nature of disgorgement with the putative nature of forfeiture. This is an area of the law to be closely followed in the coming year.
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