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A Problem Of Disgorgement

Earlier this month, the U.S. Supreme Court heard oral argument in Liu v. Securities and Exchange Commission.  The question before the court was whether a district court, in a civil enforcement action brought by the Securities and Exchange Commission, may order disgorgement of money acquired through fraud.  The case reminded me of a different question concerning disgorgement posed by Stephen Dedalus, the protagonist in James Joyce's A Portrait of the Artist as a Young Man:

"If a man had stolen a pound in his youth and had used that pound to amass a huge fortune how much was he obliged to give back, the pound he had stolen only or the pound together with the compound interest accruing upon it or all his huge fortune?"

Joyce attended Jesuit schools (Clongowes and Belvedere colleges) and Stephen Dedalus was Joyce's alter ego.  The question and an answer can be found in a catechism from the time:

"[F]ull restitution must be made not only of the things stolen . . . but also that which in the meantime, they have produced; those expenses, however, being deducted which even the owner would not have been able to avoid."

Joseph Deharbe, S.J., A Complete Catechism of the Catholic Religion, 206.  For more on Liu, see this post by Professor Stephen Bainbridge.

 

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