The Colorado Supreme Court issued its opinion in Capital Securities of America, Inc. v. Griffin, Treasurer of Jefferson County on May 29, 2012.
Purchase of Unlawful Securities—CRS § 24-75-601.1—Common Law Disgorgement as a Remedy.
In 2006, Jefferson County purchased securities through Capital Securities of America, Inc. The county later determined the purchase was unlawful under CRS § 24-75-601.1. The county sued Capital Securities and, among other things, sought to disgorge the commissions earned by Capital Securities under a theory of common law restitution. Both the trial court and the court of appeals concluded that restitution was appropriate and ordered Capital Securities to disgorge their commissions.
The Supreme Court held that disgorgement is not an available remedy against Capital Securities. Although the Colorado Legislature expressly provided a damages remedy (and specified how damages were to be calculated), an equitable remedy (repurchase), and a regulatory remedy (license revocation), it did not provide a disgorgement remedy under a theory of common law restitution. Under these circumstances, the Court concluded that the addition of disgorgement would impermissibly alter the extensive and detailed remedial scheme adopted by the legislature. Accordingly, the judgment was reversed.
Summary and full case available here.
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