Determining “profits” in SEC enforcement actions. While a panel of the US Court of Appeals for the Third Circuit unanimously found that defendants fraudulently failed to file required beneficial ownership reports, it split on whether the disgorgement sought by the SEC was proper. A majority of the panel concluded that the trial court correctly ordered defendants to pay over US$31 million in disgorgement and interest. The majority found the trial court did not abuse its discretion when it found that defendants’ profits stemmed from their failure to file the beneficial ownership reports and not the intervening purchase of the issuer by a third party. (2/10/2014) SEC v. Teo.