The Supreme Court yesterday voiced skepticism toward a plea from Wall Street’s top cop that one of its main enforcement tools shouldn’t be subject to a federal statute of limitations, the Wall Street Journal reported today. Justices from both the conservative and liberal wings of the Court didn’t appear to accept the Securities and Exchange Commission’s view that disgorgement, or clawing back ill-gotten gains from wrongdoers, isn’t subject to a five-year limit on the government’s power that dates to 1839. Chief Justice John Roberts evoked the statement of an early chief justice, John Marshall, who said it would be “utterly repugnant” to have no expiration date on the government’s authority to go after a suspected wrongdoer. “It does seem to me we kind of have a special obligation to be concerned about how far back the government can go,” Justice Roberts said during an hour-long oral argument. The case, Kokesh v. SEC, stems from a civil lawsuit the commission filed in 2009 against Charles Kokesh, a fund manager who mostly invested in startup companies. The SEC accused Kokesh of looting $45 million from the funds to pay his and other corporate officers’ salaries and bonuses and to fund office rent. Kokesh argues that the statute of limitations should have limited the $34.9 million that a lower court decided he should pay in disgorgement.
