A friend recently asked for a two-sentence summary of my view of Liu v. SEC. (I’m not sure why the friend thought that once I got started answering a question about equity and restitution I might want to go on for more than two sentences!) At any rate, here was my answer:
I think the statutory reference to “equitable relief” authorizes a traditional accounting (so only profits, not revenues; payable to the victims at least in the first instance and not to the SEC), though without any limitation to fiduciaries. I also think disgorgement is a confusing term that hides the law/equity and proprietary/non-proprietary distinctions, and it would be good to abandon it.
If you want a longer version, Henry Smith and I filed an amicus brief in the case.
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