Charles Kokesh, who won a
unanimous U.S. Supreme
Court ruling in June over
whether there was a five-
year statute of limitations in
connection with his
allegedly illegal activities, must still disgorge $5 million, a federal
appeals court said on Monday.
However, that sum is significantly less than the $34.9 million Mr.
Kokesh was originally told to pay.
The case of Securities and Exchange Commission v. Charles
Kokesh has a long litigation history.
The SEC had charged Mr.
Kokesh with misappropriating funds from four business
development companies in violation of federal securities laws
from 1995 through 2006.
Following a jury trial, in 2014 the U.S. District Court in Las Cruces,
New Mexico, ordered the disgorgement of $34.9 million plus
prejudgment interest of $18.1 million and imposed a $2.4 million
In August 2016, the 10th U. S. Circuit Court of Appeals in Denver
held the SEC was not subject to a five-year statute of limitations,
and Mr. Kokesh appealed.
However, after a contradictory opinion was issued by another
appeals court, the U.S. Supreme Court said in a unanimous 9-0
ruling in June 2017 in Mr. Kokesh’s case that the SEC’s
disgorgement recovery method is subject to a five-year statute
Monday’s ruling by the 10h Circuit focused on the issue of
whether, in light of the Supreme Court’s ruling, Mr. Kokesh is
obligated to pay $5 million in connection with activities that
occurred with the five -year limitation period.
The statute-of-limitations issue in this case “turns on whether
defendant’s misappropriation of funds … are properly viewed as
a continuing violation or as a number of discrete wrongs,” said
In ruling for the latter, the decision said: “To hold that Defendant’s
misappropriations constituted only one continuing violation
would do much more than provide repose for ancient misdeeds;
it would confer immunity for ongoing misconduct …
“We cannot continence such a result, nor do we think that a
proper interpretation of (the Supreme Court opinion) requires use
to,” said the ruling, in remanding the case with instructions to
require Mr. Kokesh to disgorge more than $5 million.