SEC Disgorgement Claim Challenged After Supreme Court’s Decision in Liu

The SEC’s disgorgement request in a litigated proceeding in federal district court is being challenged in the wake of the Supreme Court’s 2020 decision in Liu v. SEC, which limited how much the agency can seek in disgorgement.   

In April 2015, the SEC filed a complaint in the U.S. District Court for the Northern District of Texas against two California oil-and-gas companies, Team Resources, Inc., and Fossil Energy Corporation, their common principal, and four sales associates (collectively, “Team Resources”) for allegedly operating a fraudulent oil and gas production scheme. The SEC charged that Team Resources lured investors to the oil companies by touting unreasonable oil and gas production figures and distributing misleading information regarding the companies’ operations.