Disgorgement

DEFINITION of 'Disgorgement'

A repayment of ill-gotten gains that is imposed on wrong-doers by the courts. Funds that were received through illegal or unethical business transactions are disgorged, or paid back, with interest to those affected by the action. Disgorgement is a remedial civil action, rather than a punitive civil action.

BREAKING DOWN 'Disgorgement'

Individuals or companies that violate Securities and Exchange Commission (SEC) regulations are typically required to pay both civil money penalties and disgorgement. Civil money penalties are punitive, while disgorgement is about paying back profits made from those actions that violated the SEC's regulations.

However, disgorgement payments are not only demanded of those who violate securities regulations. Anyone profiting from illegal or unethical activities may be civilly required to disgorge their profits.

RELATED TERMS
  1. Civil Money Penalty - CMP

    A punitive fine imposed by a civil court on an entity that has ...
  2. Fair Funds for Investors

    Provision introduced in 2002, under Section 308(a) of the Sarbanes-Oxley ...
  3. Civil Damages

    Civil damages are usually monetary awards due to a winning plaintiff ...
  4. Civil Rights Act of 1964

    Landmark federal legislation that prohibits discrimination on ...
  5. Punitive Damages

    Legal recompense that is levied as punishment for a wrong or ...
  6. Close Period

    The time period between the completion of a listed company's ...
Related Articles
  1. Professionals

    Series 66 Exam Prep: The Broker-Dealer

    Before you take the series 66, you need to understand civil liabilities.
  2. Markets

    How The SEC Tracks Insider Trading

    We look at how the SEC tracks and tries to stop insider trading - a seemingly impossible task.
  3. Investing

    What are Business Activities?

    Business activities are any actions in which a company engages to make a profit.
  4. Markets

    History Of The U.S. Federal Trade Commission

    Since the early 1900s, the Federal Trade Commission has been working to protect U.S. citizens from corporations.
  5. Investing

    Barclays, Cr. Suisse: Highest Dark Pool Fines Ever

    Barclays Capital Inc. and Credit Suisse Securities (USA) LLC will be paying over $150 million combined for the settlement of cases related to alleged violations of securities laws while operating ...
  6. Investing

    Policing The Securities Market: An Overview Of The SEC

    Find out how this regulatory body protects the rights of investors.
  7. Markets

    Understanding the SEC

    The SEC's triple mandate of investor protection, maintenance of orderly markets and facilitation of capital formation makes it a vital player in capital markets.
  8. Investing

    Explaining Insider Trading

    While often associated with illegal activity, insider trading actually encompasses both illegal and legal trading of securities.
  9. ETFs & Mutual Funds

    Legal Risk Study: XLF, Top 3 Components With Legal Fines (GS, C)

    Discover three component companies in the Financial Select Sector SPDR ETF that have had fines imposed. Learn why the companies received penalties.
  10. Markets

    Get To Know These Crucial US Options Market Regulations

    How are options regulated in the U.S and which organizations are involved in options market regulations?
RELATED FAQS
  1. What happens to the fines collected by the Securities and Exchange Commission?

    When the Securities and Exchange Commission (SEC) enforces a civil action against a corporation or an individual found guilty ... Read Answer >>
  2. A sales representative or broker-dealer that violates the Uniform Securities Act ...

    The correct answer is a. The sales representative or broker-dealer is required to pay interest, court and attorney’s fees ... Read Answer >>
  3. What do I do if I think an accountant is in violation of the Generally Accepted Accounting ...

    Learn where to report financial accounting fraud if you suspect an accountant is in violation of the generally accepted accounting ... Read Answer >>
  4. Should mutual funds be subject to more regulation?

    Understand whether mutual funds need stricter regulation. Learn what types of current and future regulations have been put ... Read Answer >>
  5. Are IRS penalties tax deductible?

    Learn about penalties assessed by the U.S. Internal Revenue Service and how the IRS does not taxpayers to deduct them on ... Read Answer >>
  6. What legal action can I take against a debt collector?

    Find out what legal recourse is available to you as a consumer if you are being harassed by a debt collector that has violated ... Read Answer >>
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  3. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  4. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  5. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  6. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
Trading Center