US judge orders former Cemtrex exec to pay back ill-gotten gains

Reuters01-21 05:56

US judge orders former Cemtrex exec to pay back ill-gotten gains

NEW YORK, Jan 20 (Reuters) - A U.S. judge in Manhattan on Tuesday ordered the founder and former CEO of manufacturing firm Cemtrex to pay $9.7 million of ill-gotten gains and interest in a case brought by the U.S. Securities and Exchange Commission over securities fraud.

A spokesperson for the SEC declined to comment, and a lawyer for former CEO Aron Govil did not immediately respond to a request for comment.

WHY IT'S IMPORTANT

The case has been closely watched in connection with the SEC's ability to seek disgorgement, or the clawing back of illicit gains.

The 2nd U.S. Circuit Court of Appeals in 2023 prevented the agency from clawing back the gains in cases in which laws were violated but no victims were harmed. As part of that decision, the appeals court remanded the case to the district judge for recalculation of damages.

(Reporting by Chris PrenticeAdditional reporting by Jonathan Stempel; editing by Edward Tobin)

((christine.prentice@thomsonreuters.com; +1 (202) 843-6464;))

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