Key takeaways

• On May 26, 2016, a unanimous panel of the Eleventh Circuit Court of Appeals (“Eleventh Circuit” or “Court”) rejected an attempt by the Securities and Exchange Commission (“SEC”) to seek disgorgement and declaratory relief for conduct that occurred more than five years ago.
• In SEC v. Graham, the Eleventh Circuit held that the disgorgement and declaratory relief sought by the SEC are subject to the statute of limitations set forth in 28 U.S.C. § 2462, which prevents the government from enforcing “any civil fine, penalty, or forfeiture” after five years from when the claim first accrued.
• The Graham decision provides much-needed clarity on the scope of relief subject to § 2462 and, at least in the Eleventh Circuit, places important limits on the SEC’s ability to seek broad remedies in cases involving conduct occurring more than five years ago, including, for example, cases stemming from the financial crisis. The Court’s thoughtful analysis of the limits on remedies available to the SEC for conduct occurring more than five years ago could lead those involved in drawn out enforcement investigations to give greater weight to the potential drawbacks of entering into a tolling agreement with the SEC when evaluating tolling requests from the Staff.