NEW YORK, Jan 20 (Reuters) – A U.S. judge in Manhattan on Tuesday ordered the founder and former chief executive of manufacturing company Cemtrex to pay $9.7 million in ill-gotten gains and interest in a case brought by the U.S. Securities and Exchange Commission alleging securities fraud.
An SEC spokesperson declined to comment, and a lawyer for former CEO Aron Govil did not immediately respond to a request for comment.
WHY IT IS IMPORTANT
The case has been closely followed regarding the SEC’s ability to seek disgorgement or recovery of ill-gotten gains.
In 2023, the U.S. Court of Appeals for the Second Circuit blocked the agency from recovering profits in cases where laws were violated but no victims were harmed. As part of that decision, the appeals court sent the case back to the district judge to recalculate damages.
(Reporting by Chris ‌PrenticeAdditional reporting by Jonathan Stempel; editing by ‌Edward Tobin)