SEC Settlement with Disgorgement and Prejudgment Interest

Disgorgement represents a core remedial tool in SEC enforcement, requiring wrongdoers to return profits traceable to their violations. Prejudgment interest accrues from the date the violation occurred until the settlement date, compensating injured parties for the time value of money lost. This remedy is distinct from civil monetary penalties, which punish conduct, whereas disgorgement focuses on restitution. SEC settlements typically include both remedies to create a complete deterrent framework. The amount of prejudgment interest is calculated at the rate published by the U.S. Treasury Department for Treasury bills.

For quant scoring platforms focused on insider-trading detection, SEC settlement outcomes serve as important validation signals. Disgorgement orders identify specific securities, transaction dates, and profit amounts, enabling retrospective analysis of insider activity patterns. Platforms can leverage these public enforcement records to calibrate detection algorithms, refine signal persistence metrics, and strengthen conviction scoring by observing which behavioral indicators preceded successful enforcement actions. Settlement documents are filed with the SEC and constitute public record.