`(Slip Opinion)
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`
` OCTOBER TERM, 2016
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`
`Syllabus
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`1
`
` NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
`
`
`
` being done in connection with this case, at the time the opinion is issued.
`
`
`
` The syllabus constitutes no part of the opinion of the Court but has been
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` prepared by the Reporter of Decisions for the convenience of the reader.
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` See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
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`SUPREME COURT OF THE UNITED STATES
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`
` Syllabus
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`KOKESH v. SECURITIES AND EXCHANGE
`
`COMMISSION
`
`CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
`
`THE TENTH CIRCUIT
` No. 16–529. Argued April 18, 2017—Decided June 5, 2017
`
`The Securities and Exchange Commission (SEC or Commission) pos-
`sesses authority to investigate violations of federal securities laws
`and to commence enforcement actions in federal district court if its
`investigations uncover evidence of wrongdoing. Initially, the Com-
`mission’s statutory authority in enforcement actions was limited to
`seeking an injunction barring future violations. Beginning in the
`
` 1970’s, federal district courts, at the request of the Commission, be-
`gan ordering disgorgement in SEC enforcement proceedings. Alt-
`hough Congress has since authorized the Commission to seek mone-
`tary civil penalties, the Commission has continued to seek
`disgorgement. This Court has held that 28 U. S. C. §2462, which es-
`tablishes a 5-year limitations period for “an action, suit or proceeding
`for the enforcement of any civil fine, penalty, or forfeiture,” applies
`when the Commission seeks monetary civil penalties. See Gabelli v.
`
`SEC, 568 U. S. 442, 454.
`
` In 2009, the Commission brought an enforcement action, alleging
`
`that petitioner Charles Kokesh violated various securities laws by
`concealing the misappropriation of $34.9 million from four business-
`
`
`development companies from 1995 to 2009. The Commission sought
`monetary civil penalties, disgorgement, and an injunction barring
`
`Kokesh from future violations. After a jury found that Kokesh’s ac-
`tions violated several securities laws, the District Court determined
`that §2462’s 5-year limitations period applied to the monetary civil
`penalties. With respect to the $34.9 million disgorgement judgment,
`
`however, the court concluded that §2462 did not apply because dis-
`
`
`gorgement is not a “penalty” within the meaning of the statute. The
`Tenth Circuit affirmed, holding that disgorgement was neither a
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`

`

`2
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`KOKESH v. SEC
`
`
`Syllabus
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`penalty nor a forfeiture.
`Held: Because SEC disgorgement operates as a penalty under §2462,
`
`any claim for disgorgement in an SEC enforcement action must be
`commenced within five years of the date the claim accrued. Pp. 5–11.
`
`
`(a) The definition of “penalty” as a “punishment, whether corporal
`or pecuniary, imposed and enforced by the State, for a crime or of-
`
`
`
`fen[s]e against its laws,” Huntington v. Attrill, 146 U. S. 657, 667,
`gives rise to two principles. First, whether a sanction represents a
`
`penalty turns in part on “whether the wrong sought to be redressed is
`
`
`a wrong to the public, or a wrong to the individual.” Id., at 668. Sec-
`ond, a pecuniary sanction operates as a penalty if it is sought “for the
`purpose of punishment, and to deter others from offending in like
`manner” rather than to compensate victims. Ibid. This Court has
`applied these principles in construing the term “penalty,” holding,
`e.g., that a statute providing a compensatory remedy for a private
`wrong did not impose a “penalty,” Brady v. Daly, 175 U. S. 148, 154.
`Pp. 5–7.
`
`
`(b) The application of these principles here readily demonstrates
`that SEC disgorgement constitutes a penalty within the meaning of
`§2462. First, SEC disgorgement is imposed by the courts as a conse-
`
`quence for violating public laws, i.e., a violation committed against
`the United States rather than an aggrieved individual. Second, SEC
`disgorgement is imposed for punitive purposes. Sanctions imposed
`for the purpose of deterring infractions of public laws are inherently
`
`punitive because “deterrence [is] not [a] legitimate nonpunitive gov-
`
`ernmental objectiv[e].” Bell v. Wolfish, 441 U. S. 520, 539, n. 20. Fi-
`
`nally, SEC disgorgement is often not compensatory. Disgorged prof-
`
`its are paid to the district courts, which have discretion to determine
`how the money will be distributed. They may distribute the funds to
`victims, but no statute commands them to do so. When an individual
`
`is made to pay a noncompensatory sanction to the government as a
`
`consequence of a legal violation, the payment operates as a penalty.
`
`See Porter v. Warner Holding Co., 328 U. S. 395, 402. Pp. 7–9.
`
`(c) The Government responds that SEC disgorgement is not puni-
`
`tive but a remedial sanction that operates to restore the status quo.
`It is not clear, however, that disgorgement simply returns the de-
`fendant to the place he would have occupied had he not broken the
`
`law. It sometimes exceeds the profits gained as a result of the viola-
`
`
`tion. And, as demonstrated here, SEC disgorgement may be ordered
`without consideration of a defendant’s expenses that reduced the
`amount of illegal profit. In such cases, disgorgement does not simply
`restore the status quo; it leaves the defendant worse off and is there-
`fore punitive. Although disgorgement may serve compensatory goals
`
`in some cases, “sanctions frequently serve more than one purpose.”
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`

`

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`Cite as: 581 U. S. ____ (2017)
`
`
`Syllabus
`
`Austin v. United States, 509 U. S. 602, 610. Because they “go beyond
`compensation, are intended to punish, and label defendants wrong-
`doers” as a consequence of violating public laws, Gabelli, 568 U. S., at
`451–452, disgorgement orders represent a penalty and fall within
`§2462’s 5-year limitations period. Pp. 9–11.
`834 F. 3d 1158, reversed.
` SOTOMAYOR, J., delivered the opinion for a unanimous Court.
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`3
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`

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` Cite as: 581 U. S. ____ (2017)
`
`Opinion of the Court
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`1
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` NOTICE: This opinion is subject to formal revision before publication in the
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` preliminary print of the United States Reports. Readers are requested to
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` notify the Reporter of Decisions, Supreme Court of the United States, Wash-
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` ington, D. C. 20543, of any typographical or other formal errors, in order
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` that corrections may be made before the preliminary print goes to press.
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`SUPREME COURT OF THE UNITED STATES
`
`_________________
`
` No. 16–529
`_________________
` CHARLES R. KOKESH, PETITIONER v. SECURITIES
`
`
` AND EXCHANGE COMMISSION
`
`ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
`
`
`APPEALS FOR THE TENTH CIRCUIT
`
`
`[June 5, 2017]
`
` JUSTICE SOTOMAYOR delivered the opinion of the Court.
`
`A 5-year statute of limitations applies to any “action,
`suit or proceeding for the enforcement of any civil fine,
`penalty, or forfeiture, pecuniary or otherwise.” 28 U. S. C.
`§2462. This case presents the question whether §2462
`applies to claims for disgorgement imposed as a sanction
`for violating a federal securities law. The Court holds that
`it does. Disgorgement in the securities-enforcement con-
`text is a “penalty” within the meaning of §2462, and so
`
`disgorgement actions must be commenced within five
`years of the date the claim accrues.
`I
`
`A
`
`After rampant abuses in the securities industry led to
`
`the 1929 stock market crash and the Great Depression,
`Congress enacted a series of laws to ensure that “the
`highest ethical standards prevail in every facet of the
`securities industry.”1 SEC v. Capital Gains Research
`
`
`——————
`
` 1Each of these statutes—the Securities Act of 1933, 15 U. S. C. §77a
`
`et seq.; the Securities Exchange Act of 1934, 15 U. S. C. §78a et seq.; the
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`

`

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`
`KOKESH v. SEC
`
`Opinion of the Court
`Bureau, Inc., 375 U. S. 180, 186–187 (1963) (internal
`quotation marks omitted). The second in the series—the
`Securities Exchange Act of 1934—established the Securi-
`ties and Exchange Commission (SEC or Commission) to
`
`enforce federal securities laws. Congress granted the Com-
`mission power to prescribe “‘rules and regulations . . . as
`necessary or appropriate in the public interest or for the
`
`protection of investors.’” Blue Chip Stamps v. Manor
`Drug Stores, 421 U. S. 723, 728 (1975). In addition to
`rulemaking, Congress vested the Commission with “broad
`authority to conduct investigations into possible violations
`of the federal securities laws.” SEC v. Jerry T. O’Brien,
`Inc., 467 U. S. 735, 741 (1984). If an investigation uncov-
`
`ers evidence of wrongdoing, the Commission may initiate
`
`enforcement actions in federal district court.
`
`Initially, the only statutory remedy available to the SEC
`in an enforcement action was an injunction barring future
`violations of securities laws. See 1 T. Hazen, Law of Secu-
`rities Regulation §1:37 (7th ed., rev. 2016). In the absence
`of statutory authorization for monetary remedies, the
`Commission urged courts to order disgorgement as an
`exercise of their “inherent equity power to grant relief
`ancillary to an injunction.” SEC v. Texas Gulf Sulphur
`Co., 312 F. Supp. 77, 91 (SDNY 1970), aff ’d in part and
`rev’d in part, 446 F. 2d 1301 (CA2 1971). Generally, dis-
`gorgement is a form of “[r]estitution measured by the
`defendant’s wrongful gain.” Restatement (Third) of Resti-
`tution and Unjust Enrichment §51, Comment a, p. 204
`——————
`Public Utility Holding Company Act of 1935, 15 U. S. C. §79 et seq.; the
`Trust Indenture Act of 1939, 15 U. S. C. §77aaa et seq.; the Investment
`
`
`
`Company Act of 1940, 15 U. S. C. §80a–1 et seq.; and the Investment
`
`Advisers Act of 1940, 15 U. S. C. §80b–1 et seq.—serves the “fundamen-
`
`tal purpose” of “substitut[ing] a philosophy of full disclosure for the
`
`
`philosophy of caveat emptor and thus . . . achiev[ing] a high standard of
`
`
`business ethics in the securities industry.” SEC v. Capital Gains
`
`Research Bureau, Inc., 375 U. S. 180, 186 (1963).
`
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`
`2
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`

`

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` Cite as: 581 U. S. ____ (2017)
`
`Opinion of the Court
`(2010) (Restatement (Third)). Disgorgement requires that
`the defendant give up “those gains . . . properly attribut-
`able to the defendant’s interference with the claimant’s
`legally protected rights.” Ibid. Beginning in the 1970’s,
`courts ordered disgorgement in SEC enforcement proceed-
`ings in order to “deprive . . . defendants of their profits in
`order to remove any monetary reward for violating” secu-
`rities laws and to “protect the investing public by provid-
`ing an effective deterrent to future violations.” Texas
`Gulf, 312 F. Supp., at 92.
`In 1990, as part of the Securities Enforcement Remedies
`
`and Penny Stock Reform Act, Congress authorized the
`Commission to seek monetary civil penalties. 104 Stat.
`932, codified at 15 U. S. C. §77t(d). The Act left the Com-
`mission with a full panoply of enforcement tools: It may
`promulgate rules, investigate violations of those rules and
`the securities laws generally, and seek monetary penal-
`
`ties and injunctive relief for those violations. In the
`years since the Act, however, the Commission has con-
`tinued its practice of seeking disgorgement in enforcement
`proceedings.
`This Court has already held that the 5-year statute of
`
`limitations set forth in 28 U. S. C. §2462 applies when the
`Commission seeks statutory monetary penalties. See
`Gabelli v. SEC, 568 U. S. 442, 454 (2013). The question
`
`
`here is whether §2462, which applies to any “action, suit
`or proceeding for the enforcement of any civil fine, penalty,
`
`or forfeiture, pecuniary or otherwise,” also applies when
`
`the SEC seeks disgorgement.
`B
`Charles Kokesh owned two investment-adviser firms
`
`that provided investment advice to business-development
`companies. In late 2009, the Commission commenced an
`enforcement action in Federal District Court alleging that
`between 1995 and 2009, Kokesh, through his firms, mis-
`
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`3
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`

`4
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` KOKESH v. SEC
`
`Opinion of the Court
`appropriated $34.9 million from four of those development
`companies. The Commission further alleged that, in order
`to conceal the misappropriation, Kokesh caused the filing
`of false and misleading SEC reports and proxy statements.
`The Commission sought civil monetary penalties, dis-
`gorgement, and an injunction barring Kokesh from violat-
`ing securities laws in the future.
`After a 5-day trial, a jury found that Kokesh’s actions
`
`violated the Investment Company Act of 1940, 15 U. S. C.
`§80a–36; the Investment Advisers Act of 1940, 15 U. S. C.
`§§80b–5, 80b–6; and the Securities Exchange Act of 1934,
`15 U. S. C. §§78m, 78n. The District Court then turned to
`the task of imposing penalties sought by the Commission.
`
`As to the civil monetary penalties, the District Court
`
`determined that §2462’s 5-year limitations period pre-
`cluded any penalties for misappropriation occurring prior to
`
`October 27, 2004—that is, five years prior to the date the
`Commission filed the complaint. App. to Pet. for Cert.
`26a. The court ordered Kokesh to pay a civil penalty of
`$2,354,593, which represented “the amount of funds that
`[Kokesh] himself received during the limitations period.”
`Id., at 31a–32a. Regarding the Commission’s request for a
`$34.9 million disgorgement judgment—$29.9 million of
`which resulted from violations outside the limitations
`period—the court agreed with the Commission that be-
`cause disgorgement is not a “penalty” within the meaning
`of §2462, no limitations period applied. The court there-
`fore entered a disgorgement judgment in the amount of
`
`$34.9 million and ordered Kokesh to pay an additional
`$18.1 million in prejudgment interest.
`The Court of Appeals for the Tenth Circuit affirmed.
`
`834 F. 3d 1158 (2016). It agreed with the District Court
`that disgorgement is not a penalty, and further found that
`disgorgement is not a forfeiture. Id., at 1164–1167. The
`
`court thus concluded that the statute of limitations in
`
`§2462 does not apply to SEC disgorgement claims.
`
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`

`

`5
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`
`Cite as: 581 U. S. ____ (2017)
`
`Opinion of the Court
`This Court granted certiorari, 580 U. S. ___ (2017), to
`
`
`resolve disagreement among the Circuits over whether
`disgorgement claims in SEC proceedings are subject to the
`5-year limitations period of §2462.2
`
`
`II
`
`
`Statutes of limitations “se[t] a fixed date when exposure
`
`to the specified Government enforcement efforts en[d].”
`Gabelli, 568 U. S., at 448. Such limits are “‘vital to the
`welfare of society’” and rest on the principle that “‘even
`wrongdoers are entitled to assume that their sins may be
`
`forgotten.’” Id., at 449. The statute of limitations at issue
`
`here—28 U. S. C. §2462—finds its roots in a law enacted
`
`
`
`
`nearly two centuries ago. 568 U. S., at 445. In its current
`form, §2462 establishes a 5-year limitations period for “an
`action, suit or proceeding for the enforcement of any civil
`fine, penalty, or forfeiture.” This limitations period ap-
`plies here if SEC disgorgement qualifies as either a fine,
`penalty, or forfeiture. We hold that SEC disgorgement
`
`constitutes a penalty.3
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`
`
`
`
`A
`
`A “penalty” is a “punishment, whether corporal or pecu-
`niary, imposed and enforced by the State, for a crime or
`offen[s]e against its laws.” Huntington v. Attrill, 146 U. S.
`657, 667 (1892). This definition gives rise to two princi-
`ples. First, whether a sanction represents a penalty turns
`——————
`2Compare SEC v. Graham, 823 F. 3d 1357, 1363 (CA11 2016) (hold-
`
`ing that §2462 applies to SEC disgorgement claims), with Riordan v.
`
`SEC, 627 F. 3d 1230, 1234 (CADC 2010) (holding that §2462 does not
`
`apply to SEC disgorgement claims).
`3Nothing in this opinion should be interpreted as an opinion on
`whether courts possess authority to order disgorgement in SEC en-
`
`forcement proceedings or on whether courts have properly applied
`disgorgement principles in this context The sole question presented in
`
`this case is whether disgorgement, as applied in SEC enforcement
`actions, is subject to §2462’s limitations period.
`
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`

`

`6
`
`
`
`
` KOKESH v. SEC
`
`Opinion of the Court
`in part on “whether the wrong sought to be redressed is a
`
`wrong to the public, or a wrong to the individual.” Id., at
`668. Although statutes creating private causes of action
`against wrongdoers may appear—or even be labeled—
`penal, in many cases “neither the liability imposed nor the
`remedy given is strictly penal.” Id., at 667. This is be-
`cause “[p]enal laws, strictly and properly, are those impos-
`ing punishment for an offense committed against the
`State.” Ibid. Second, a pecuniary sanction operates as a
`penalty only if it is sought “for the purpose of punishment,
`and to deter others from offending in like manner”—as
`opposed to compensating a victim for his loss. Id., at 668.
`
`
`The Court has applied these principles in construing the
`
`term “penalty.” In Brady v. Daly, 175 U. S. 148 (1899), for
`example, a playwright sued a defendant in Federal Circuit
`Court under a statute providing that copyright infringers
`“‘shall be liable for damages . . . not less than one hundred
`
`dollars for the first [act of infringement], and fifty dollars
`for every subsequent performance, as to the court shall
`appear to be just.’” Id., at 153. The defendant argued
`that the Circuit Court lacked jurisdiction on the ground
`that a separate statute vested district courts with exclu-
`sive jurisdiction over actions “to recover a penalty.” Id., at
`152. To determine whether the statutory damages repre-
`sented a penalty, this Court noted first that the statute
`provided “for a recovery of damages for an act which vio-
`
`lates the rights of the plaintiff, and gives the right of
`action solely to him” rather than the public generally, and
`second, that “the whole recovery is given to the proprietor,
`and the statute does not provide for a recovery by any
`other person.” Id., at 154, 156. By providing a compensa-
`tory remedy for a private wrong, the Court held, the stat-
`ute did not impose a “penalty.” Id., at 154.
`
`Similarly, in construing the statutory ancestor of §2462,
`the Court utilized the same principles. In Meeker v.
`Lehigh Valley R. Co., 236 U. S. 412, 421–422 (1915), the
`
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`

`

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`
`
`7
`
` Cite as: 581 U. S. ____ (2017)
`
`Opinion of the Court
`Interstate Commerce Commission, a now-defunct federal
`agency charged with regulating railroads, ordered a rail-
`road company to refund and pay damages to a shipping
`company for excessive shipping rates. The railroad com-
`pany argued that the action was barred by Rev. Stat.
`§1047, Comp. Stat. 1913, §1712 (now 28 U. S. C. §2462),
`which imposed a 5-year limitations period upon any “‘suit
`or prosecution for a penalty or forfeiture, pecuniary or
`otherwise, accruing under the laws of the United States.’”
`236 U. S., at 423. The Court rejected that argument,
`reasoning that “the words ‘penalty or forfeiture’ in [the
`statute] refer to something imposed in a punitive way for
`an infraction of a public law.” Ibid. A penalty, the Court
`held, does “not include a liability imposed [solely] for the
`purpose of redressing a private injury.” Ibid. Because the
`liability imposed was compensatory and paid entirely to a
`private plaintiff, it was not a “penalty” within the meaning
`
`of the statute of limitations. Ibid.; see also Gabelli, 568
`U. S., at 451–452 (“[P]enalties” in the context of §2462 “go
`beyond compensation, are intended to punish, and label
`defendants wrongdoers”).
`
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`
`
`
`
`B
`Application of the foregoing principles readily demon-
`
`strates that SEC disgorgement constitutes a penalty
`within the meaning of §2462.
`
`First, SEC disgorgement is imposed by the courts as a
`
`
`consequence for violating what we described in Meeker as
`public laws. The violation for which the remedy is sought
`is committed against the United States rather than an
`aggrieved individual—this is why, for example, a securities-
`enforcement action may proceed even if victims do not
`support or are not parties to the prosecution. As the Gov-
`ernment concedes, “[w]hen the SEC seeks disgorgement, it
`
`acts in the public interest, to remedy harm to the public at
`large, rather than standing in the shoes of particular
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`

`

`8
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` KOKESH v. SEC
`
`Opinion of the Court
` injured parties.” Brief for United States 22. Courts agree.
`
`
`
` See, e.g., SEC v. Rind, 991 F. 2d 1486, 1491 (CA9 1993)
`(“[D]isgorgement actions further the Commission’s public
`policy mission of protecting investors and safeguarding the
`integrity of the markets”); SEC v. Teo, 746 F. 3d 90, 102
`
`(CA3 2014) (“[T]he SEC pursues [disgorgement] ‘inde-
`
`pendent of the claims of individual investors’” in order to
`“‘promot[e] economic and social policies’”).
`
`
`Second, SEC disgorgement is imposed for punitive
`purposes. In Texas Gulf—one of the first cases requiring
`disgorgement in SEC proceedings—the court emphasized
`the need “to deprive the defendants of their profits in
`order to . . . protect the investing public by providing an
`effective deterrent to future violations.” 312 F. Supp., at
`92. In the years since, it has become clear that deterrence
`is not simply an incidental effect of disgorgement. Rather,
`courts have consistently held that “[t]he primary purpose
`of disgorgement orders is to deter violations of the securi-
`ties laws by depriving violators of their ill-gotten gains.”
`
`
`SEC v. Fischbach Corp., 133 F. 3d 170, 175 (CA2 1997);
`
`see also SEC v. First Jersey Securities, Inc., 101 F. 3d
`1450, 1474 (CA2 1996) (“The primary purpose of dis-
`
`gorgement as a remedy for violation of the securities laws
`is to deprive violators of their ill-gotten gains, thereby
`effectuating the deterrence objectives of those laws”);
`
`Rind, 991 F. 2d, at 1491 (“‘The deterrent effect of [an SEC]
`enforcement action would be greatly undermined if securi-
`ties law violators were not required to disgorge illicit
`profits’”). Sanctions imposed for the purpose of deterring
`infractions of public laws are inherently punitive because
`“deterrence [is] not [a] legitimate nonpunitive governmen-
`
`tal objectiv[e].” Bell v. Wolfish, 441 U. S. 520, 539, n. 20
`(1979); see also United States v. Bajakajian, 524 U. S. 321,
`329 (1998) (“Deterrence . . . has traditionally been viewed
`as a goal of punishment”).
`
`Finally, in many cases, SEC disgorgement is not com-
`
`
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`

`

`
`
` Cite as: 581 U. S. ____ (2017)
`
`Opinion of the Court
`pensatory. As courts and the Government have employed
`the remedy, disgorged profits are paid to the district court,
`and it is “within the court’s discretion to determine how
`and to whom the money will be distributed.” Fischbach
`Corp., 133 F. 3d, at 175. Courts have required disgorge-
`ment “regardless of whether the disgorged funds will be
`paid to such investors as restitution.” Id., at 176; see id.,
`at 175 (“Although disgorged funds may often go to com-
`pensate securities fraud victims for their losses, such
`compensation is a distinctly secondary goal”). Some dis-
`gorged funds are paid to victims; other funds are dispersed
`to the United States Treasury. See, e.g., id., at 171 (af-
`firming distribution of disgorged funds to Treasury where
`“no party before the court was entitled to the funds and
`. . . the persons who might have equitable claims were too
`dispersed for feasible identification and payment”); SEC v.
`Lund, 570 F. Supp. 1397, 1404–1405 (CD Cal. 1983) (or-
`dering disgorgement and directing trustee to disperse
`funds to victims if “feasible” and to disperse any remain-
`ing money to the Treasury). Even though district courts
`may distribute the funds to the victims, they have not
`identified any statutory command that they do so. When
`an individual is made to pay a noncompensatory sanction
`to the Government as a consequence of a legal violation,
`the payment operates as a penalty. See Porter v. Warner
`Holding Co., 328 U. S. 395, 402 (1946) (distinguishing
`between restitution paid to an aggrieved party and penal-
`ties paid to the Government).
`
`SEC disgorgement thus bears all the hallmarks of a
`penalty: It is imposed as a consequence of violating a
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`public law and it is intended to deter, not to compensate.
`The 5-year statute of limitations in §2462 therefore ap-
`plies when the SEC seeks disgorgement.
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`The Government’s primary response to all of this is that
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`10
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` KOKESH v. SEC
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`Opinion of the Court
` SEC disgorgement is not punitive but “remedial” in that it
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`“lessen[s] the effects of a violation” by “‘restor[ing] the
`status quo.’” Brief for Respondent 17. As an initial mat-
`ter, it is not clear that disgorgement, as courts have ap-
`plied it in the SEC enforcement context, simply returns
`the defendant to the place he would have occupied had he
`not broken the law. SEC disgorgement sometimes exceeds
`the profits gained as a result of the violation. Thus, for
`example, “an insider trader may be ordered to disgorge not
`only the unlawful gains that accrue to the wrongdoer
`directly, but also the benefit that accrues to third parties
`whose gains can be attributed to the wrongdoer’s conduct.”
`SEC v. Contorinis, 743 F. 3d 296, 302 (CA2 2014). Indi-
`viduals who illegally provide confidential trading infor-
`mation have been forced to disgorge profits gained by
`individuals who received and traded based on that infor-
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`mation—even though they never received any profits.
`Ibid; see also SEC v. Warde, 151 F. 3d 42, 49 (CA2 1998)
`(“A tippee’s gains are attributable to the tipper, regardless
`whether benefit accrues to the tipper”); SEC v. Clark, 915
`F. 2d 439, 454 (CA9 1990) (“[I]t is well settled that a tipper
`can be required to disgorge his tippees’ profits”). And, as
`demonstrated by this case, SEC disgorgement sometimes
`is ordered without consideration of a defendant’s expenses
`that reduced the amount of illegal profit. App. to Pet. for
`Cert. 43a; see Restatement (Third) §51, Comment h, at
`216 (“As a general rule, the defendant is entitled to a
`deduction for all marginal costs incurred in producing the
`revenues that are subject to disgorgement. Denial of an
`otherwise appropriate deduction, by making the defendant
`liable in excess of net gains, results in a punitive sanction
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`that the law of restitution normally attempts to avoid”).
`In such cases, disgorgement does not simply restore the
`status quo; it leaves the defendant worse off. The justifi-
`cation for this practice given by the court below demon-
`strates that disgorgement in this context is a punitive,
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` Cite as: 581 U. S. ____ (2017)
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`Opinion of the Court
`rather than a remedial, sanction: Disgorgement, that court
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`explained, is intended not only to “prevent the wrongdoer’s
`unjust enrichment” but also “to deter others’ violations of
`the securities laws.” App. to Pet. for Cert. 43a.
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`True, disgorgement serves compensatory goals in some
`cases; however, we have emphasized “the fact that sanc-
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`tions frequently serve more than one purpose.” Austin v.
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`United States, 509 U. S. 602, 610 (1993). “‘A civil sanction
`that cannot fairly be said solely to serve a remedial pur-
`pose, but rather can only be explained as also serving
`either retributive or deterrent purposes, is punishment, as
`we have come to understand the term.’” Id., at 621; cf.
`Bajakajian, 524 U. S., at 331, n. 6 (“[A] modern statutory
`forfeiture is a ‘fine’ for Eighth Amendment purposes if it
`constitutes punishment even in part”). Because disgorge-
`ment orders “go beyond compensation, are intended to
`punish, and label defendants wrongdoers” as a conse-
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`quence of violating public laws, Gabelli, 568 U. S., at 451–
`452, they represent a penalty and thus fall within the 5-
`year statute of limitations of §2462.
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`III
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`Disgorgement, as it is applied in SEC enforcement
`proceedings, operates as a penalty under §2462. Accord-
`ingly, any claim for disgorgement in an SEC enforcement
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`action must be commenced within five years of the date
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`the claim accrued.
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`The judgment of the Court of Appeals for the Tenth
`Circuit is reversed.
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`It is so ordered.
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