from the United States District Court for the District of New
Mexico (D.C. No. 1:09-CV-01021-SMV-LAM)
Clinton W. Marrs, Marrs Griebel Law, Ltd., Albuquerque, New
Mexico for Defendant-Appellant.
B. Stebbins, General Counsel, Michael A. Conley, Solicitor,
and Sarah R. Prins, Senior Counsel, Securities and Exchange
Commission, Washington, D.C., for Plaintiff-Appellee.
HARTZ, PHILLIPS, and McHUGH, Circuit Judges.
case returns to us after reversal and remand from the United
States Supreme Court. The Supreme Court held that the claims
for disgorgement against Defendant Charles Kokesh brought by
the Securities and Exchange Commission (SEC) were subject to
the five-year limitations period in 28 U.S.C. § 2462.
The SEC contends that $5, 004, 773 was converted within this
period and must be disgorged. Mr. Kokesh contends that the
SEC's causes of action first accrued more than five years
before it filed its claim. We agree with the SEC because the
SEC's claims accrued separately for each conversion of
owned and controlled two SEC-registered investment-adviser
firms, Technology Funding Ltd. (TFL) and Technology Funding,
Inc. (TFI), which were the managing general partners of, and
contracted to provide investment advice to, several
SEC-registered business-development companies (the BDCs)
formed by Defendant. The contracts that the BDCs had with TFL
and TFI (the Advisers) prohibited payments to the Advisers
not expressly delineated in the contracts. Nevertheless,
Defendant directed the treasurer for the Advisers to take
substantial sums from the BDCs to pay salaries and bonuses to
Defendant and other officers and, although expressly
prohibited in the contracts, to reimburse the Advisers'
office rent. A 2000 amendment to the contracts between the
BDCs and the Advisers authorized reimbursements to cover the
salaries of the Advisers' "controlling persons,
" a term that included Defendant and other officers. But
the amendment was obtained through misleading proxy
statements signed by Defendant that falsely identified him as
the only controlling person and grossly underreported his
B. Procedural History
filed its complaint against Defendant in New Mexico federal
court on October 27, 2009. Among other things, it alleged
that from 1995 through 2006 Defendant had misappropriated
over $34.9 million from the BDCs to the Advisers. After a
jury found that Defendant had committed the fraud, the
district court ordered (1) that he pay a civil penalty of $2,
354, 593; (2) that he be enjoined from violating securities
laws in the future; and (3) that he disgorge $34, 927, 329
(plus interest). He appealed and we affirmed. See SEC v.
Kokesh, 834 F.3d 1158, 1168 (10th Cir. 2016).
sought Supreme Court review of our decision that the
disgorgement claim was not subject to the five-year statute
of limitations governing suits "for the enforcement of
any civil fine, penalty, or forfeiture." 28 U.S.C.
§ 2462. The Supreme Court reversed, holding that
"[d]isgorgement in the securities-enforcement context is
a 'penalty' within the meaning of § 2462, and so
disgorgement actions must be commenced within five years of
the date the claim accrues." Kokesh v. SEC, 137
S.Ct. 1635, 1639 (2017).
remand the SEC contends that Defendant must disgorge $5, 004,
773 converted within the limitations period-that is, after
October 27, 2004. That sum comprises $279, 295 for payment of
office rent; $1, 200, 000 paid as a bonus to Defendant and
another officer; and other payments to controlling persons
totaling $3, 525, 478.