By Better Markets
One of the most basic principles of law is that – not matter what else –– a crook should and must give up the money he or she took from the unsuspecting victims, often called “ill-gotten gains.” That is the legal concept of “disgorgement” and it is overwhelmingly important because, otherwise, crooks would be able to keep the profits acquired from their illegal activities. Yes, they should also be fined, barred from the industry and, if criminal, sent to prison. But no matter what else happens to a crook, they must at a minimum give up their ill-gotten gains or their criminal activity is actually incentivized.
Unsurprisingly, crooks don’t like disgorgement, and some are currently trying to get the Supreme Court to declare that the SEC doesn’t have the authority to obtain disgorgement even though it has been using this key investor protection tool for 50 years. We went to court – the Supreme Court in fact – to support the SEC and protect investors and victims of securities fraud and other crimes.
Better Markets (along with the Consumer Federation of America) also filed an amicus brief urging the Court of Appeals for the Second Circuit to invalidate the SEC’s intentionally misleadingly labeled “Regulation Best Interest” (Reg BI) Rule on numerous grounds. Financial advisers’ conflicts of interest are costing tens of millions of hardworking Americans tens of billions of dollars every year. That’s why Americans need a strong, clear rule that actually requires all financial advisers to always act in the best interests of their clients without regard to the adviser’s own financial gain. Reg BI does not do that, and the court should throw it out.