Jalbert v. SEC, 945 F.3d 587

F-Squared, an SEC-registered investment adviser, executed an Offer of Settlement (Dec. 4, 2014) that—pursuant to 17 C.F.R. §201.240—expressly acknowledged waiver of judicial review if the SEC accepted the Offer.
The SEC accepted and entered a consent Order (Dec. 22, 2014) in which F-Squared admitted securities-law violations and paid $30 million in disgorgement plus a $5 million penalty (total $35 million) to the Treasury.
F-Squared later filed for bankruptcy; the F2 Liquidating Trust was formed and trustee Craig R. Jalbert sued the SEC (Oct. 26, 2017) under the APA seeking to set aside the disgorgement and recover funds, relying on the Supreme Court’s decision in Kokesh.
Jalbert alleged disgorgement was punitive/unauthorized (post-Kokesh) and procedurally invalid (no adequate accounting); he also sought class relief for similarly situated payors.
The district court dismissed for lack of subject-matter jurisdiction and for failure to state a claim, concluding F-Squared had clearly and unambiguously waived judicial review; the First Circuit affirmed on the waiver ground.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Enforceability of settlement waiver of judicial review	Waiver is void or unenforceable as to challenges to disgorgement	Waiver was knowing, voluntary, and required by SEC Rule 240; bars judicial review	Waiver is enforceable; complaint fails to state a claim
Effect of Kokesh and separation-of-powers claim	Kokesh shows disgorgement is punitive → SEC exceeded authority; separation-of-powers issue not waivable	Kokesh was limited to civil enforcement statute-of-limitations; Congress authorized administrative disgorgement; no structural separation violation	Kokesh doesn’t negate administrative disgorgement authority; separation-of-powers not implicated; ultra vires/statutory claims are waivable
APA review vs. Rule 240 waiver (can SEC "contract out" of APA review?)	Rule 240 cannot overcome APA’s presumption of reviewability	APA contemplates settlement; Rule 240 and similar agency rules permit waiver as condition of consent settlements	APA does not prevent a knowing waiver in a consent settlement; waiver valid
Mutual mistake / contract defense based on subsequent change in law	Settlement is void for mutual mistake because Kokesh changed the law after settlement	Mistake doctrine inapplicable: parties relied on then-settled law; change was unforeseeable and not a fact ascertainable at signing	Mutual-mistake defense rejected; settlement remains binding

Kokesh v. SEC, 137 S. Ct. 1635 (holding disgorgement is a "penalty" for statute-of-limitations purposes)
City of Arlington v. FCC, 569 U.S. 290 (2013) (explaining agency "ultra vires" and that such claims can be waivable)
Boston Redevelopment Auth. v. Nat'l Park Serv., 838 F.3d 42 (1st Cir. 2016) (statutory-construction challenges to agency action are subject to waiver)
Pruell v. Caritas Christi, 645 F.3d 81 (1st Cir. 2011) (class-claims depend on named plaintiffs’ established jurisdiction)
Gonzalez v. Thaler, 565 U.S. 134 (2012) (distinction between jurisdictional and nonjurisdictional grounds for waiver)
United States v. Hilario, 218 F.3d 19 (1st Cir. 2000) (separation-of-powers principles and limits on executive aggrandizement)