NICK EICHER, HOST: It’s Tuesday, the 23rd of June, 2020. You’re listening to The World and Everything in It and we are so glad you are! Good morning, I’m Nick Eicher.
MARY REICHARD, HOST: And I’m Mary Reichard. The justices of the U.S. Supreme Court handed down just one opinion yesterday.
The ruling affirms the Securities and Exchange Commission’s ability to recoup money from fraudsters, with some limits.
Here, a husband and wife solicited money to build a cancer treatment center. They took in nearly $27 million dollars from investors, but never built the facility. The SEC sued and a lower court ordered the couple to return most of that money.
The fraudsters appealed, arguing that the money calculation didn’t take into account what they’d spent on legitimate business matters.
EICHER: In an 8-to-1 ruling, the court said recouped money must benefit investors and not be greater than the profits from wrongdoing. The case now goes back to lower court with instructions to determine what that dollar amount should be.
In his lone dissent, Justice Clarence Thomas complained the law does not give the SEC authority to do this.
The SEC recoups more than a billion dollars every year in what’s known as “disgorgement” orders. That’s different from fines meant to punish.