Pennsylvania joins petition to give SEC more power to protect investors

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Pennsylvania’s top law enforcement officials filed a brief this week arguing that the federal Securities and Exchange Commission should have the power to require defendants accused of defrauding investors to give back their fraudulent earnings.

With a coalition of 24 other states, state Attorney General Josh Shapiro filed an amicus brief with the Supreme Court arguing that not giving the SEC more authority would embolden bad actors to harm investors, making for dysfunctional securities markets.

“No matter if you are a small or large investor, there should be financial recourse if you’ve been scammed out of your retirement or college savings,” Shapiro said in an official statement to reporters. “The SEC’s ability to seek restitution on behalf of defrauded investors is good practice, and it builds public trust in our markets.”

Disgorgement, or the practice of profiteers returning their fraudulent earnings, is contended by the brief to be one of the surest ways to restore losses to investors that have been harmed, Shapiro said.

In 2019, parties to judicial and administrative enforcement actions brought by the SEC were ordered to return more than $3.2 billion to investors.