Categories: Legal

Supreme Court May Allow SEC To Recoup Fraud Money

The Supreme Court on Tuesday (March 3), possibly inched closer to a decision that would allow the Securities and Exchange Commission (SEC) to recoup money from fraudsters, according to a report from the Associated Press.

The highest court in the U.S. was hearing a case about a husband and wife who were compelled to hand over $27 million after they were found guilty in a lower court of perpetrating a scheme to get investors in China to back a cancer center in Southern California.

The justices could potentially tack some limits on how the money is collected by the SEC, but the ruling did not seem to indicate the SEC didn’t have the power to get the money back.

“Isn’t it an equitable principle that no one should be allowed to profit from his own wrong?” Justice Ruth Bader Ginsburg said to Gregory Rapawy, the lawyer for Charles Liu and Xin “Lisa” Wang, the Chinese couple.

Rapawy said a ruling shouldn’t leave his clients in a worse position than they were before the scheme. The couple saw profits of $8.2 million from their actions and were forced to pay $27 million. Rapawy said most of the money was used for property development and for marketing.

The couple are basing their case on a unanimous decision by the Supreme Court in 2017 that curbed the SEC’s ability to seek profits from fraud before charges are filed by authorities.

However, the case did not answer the question of whether the courts had the authority to order repayment of the money. The SEC has also continued to seek out profits in other similar cases. In 2019, the SEC told a Florida federal judge to compel alleged Ponzi scheme defendants to give back $892 million in profits. The Supreme Court is expected to rule on the case of the Chinese couple in June.

Get our hottest stories delivered to your inbox.

Sign up for the Newsletter to get updates on top stories and viral hits.


New PYMNTS Study: Subscription Commerce Conversion Index – July 2020

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.


Recent Posts

SEC Probes Timing Of Eastman Kodak’s Announcement Of $765M Loan

Eastman Kodak’s surprise announcement of plans to reinvent itself as a drug manufacturer has run afoul of the U.S. Securities…

8 mins ago

Intuit Inks Deal To Purchase Order Management Provider TradeGecko

Intuit, maker of QuickBooks, has inked a deal to purchase inventory and order management technology provider TradeGecko. The deal is…

25 mins ago To Trim Employee Roster By 25 Pct Globally

Booking Holding Inc., the Connecticut-based company that owns travel website, plans to reduce its workforce by as many as…

43 mins ago

Grab Launches Microinvestment Solution, Consumer Loans, BNPL Plans

Grab Financial Group (GFG), a Southeast Asia financial technology (FinTech) and ridesharing company, is expanding its reach with the announcement on…

54 mins ago

The State Of Main Street In 2020’s Second Half

The first half of 2020 was a tough time to run a small business on Main Street as stay-at-home orders…

2 hours ago

Today In Payments: Amex Grows BNPL Options; Facebook Unveils Commerce Accelerator Plans

In today’s top news, American Express has unveiled a new payment option, and Facebook has revealed plans for a Commerce…

2 hours ago