National Defense Authorization Act Codifies SEC's Right to Seek Disgorgement; Grants Agency a 10-Year Statute of Limitations in Certain Cases
When the United States Senate overrode the President’s veto of the National Defense Authorization Act (“NDAA”) for Fiscal Year 2021 on January 1, 2021 it, among other things:
- Provided, for the first time, express statutory authority for the U.S. Securities and Exchange Commission (“SEC”) to pursue disgorgement for violations of the federal securities laws;
- Expanded the SEC’s statute of limitations to seek disgorgement—from five years to 10 years—for scienter-based claims; and
- Codified an indefinite tolling of the limitations period while defendants remain outside of the United States.