Kokesh v. SEC, 581 U.S. 455

The SEC sued Charles Kokesh in 2009, alleging he misappropriated $34.9 million from business-development companies from 1995–2009 and filed false SEC reports.
The SEC sought civil monetary penalties, disgorgement of the $34.9 million, and an injunction.
After a jury verdict for the SEC, the district court applied 28 U.S.C. §2462’s 5‑year statute of limitations to civil penalties but held disgorgement was not a “penalty,” so §2462 did not bar disgorgement; it entered a $34.9 million disgorgement judgment plus prejudgment interest.
The Tenth Circuit affirmed the district court, holding disgorgement was neither a penalty nor a forfeiture under §2462.
The Supreme Court granted certiorari to resolve a circuit split on whether §2462’s 5‑year limitations period applies to SEC disgorgement claims.
The Supreme Court reversed, holding SEC disgorgement is a “penalty” within §2462 and thus subject to the 5‑year limitations period.

Issue	Plaintiff's Argument (Kokesh)	Defendant's Argument (SEC/Government)	Held
Whether §2462’s 5‑year limitations period applies to SEC disgorgement claims	§2462 applies; disgorgement is not a "penalty," so claims beyond 5 years are time‑barred	Disgorgement is remedial, equitable restitution to restore status quo, not a penalty	Held: §2462 applies — disgorgement is a "penalty" and claims must be brought within 5 years
Whether disgorgement is a public (penal) or private (compensatory) remedy	Disgorgement functions to make victims whole (private/compensatory)	Disgorgement enforces public securities laws and vindicates public interest	Held: Disgorgement enforces public laws; remedy vindicates public interest, not solely private injury
Whether disgorgement is punitive or purely remedial	Disgorgement is remedial, restoring status quo	Disgorgement often serves deterrent/punitive aims, can exceed net profits and be paid to Treasury	Held: Disgorgement often punitive (deterrence, may exceed profits, may not compensate victims) — therefore penal in part

Gabelli v. SEC, 568 U.S. 442 (2013) (applies §2462’s limitations period to statutory civil penalties)
Huntington v. Attrill, 146 U.S. 657 (1892) (defines "penalty" and distinguishes public vs. private wrongs)
Brady v. Daly, 175 U.S. 148 (1899) (statutory damages to private plaintiff are compensatory, not a penalty)
Meeker v. Lehigh Valley R. Co., 236 U.S. 412 (1915) (liability imposed to redress a private injury is not a "penalty" under §2462’s precursor)
Bell v. Wolfish, 441 U.S. 520 (1979) (deterrence is a punitive purpose)
Porter v. Warner Holding Co., 328 U.S. 395 (1946) (distinguishes restitution to victims from penalties paid to government)
Austin v. United States, 509 U.S. 602 (1993) (civil sanctions serving more than remedial purposes can be punishment)
United States v. Bajakajian, 524 U.S. 321 (1998) (deterrence characterized as a traditional goal of punishment)