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U.S. top court rules against SEC over recovery of ill-gotten gains

WASHINGTON, June 5 (Reuters) - The U.S. Supreme Court on Monday scaled back the Securities and Exchange Commission's power to recover ill-gotten profits from defendants' misconduct, handing Wall Street firms a victory and dealing another blow to the regulator's enforcement powers.

In a 9-0 ruling, the Supreme Court found that the SEC's recovery remedy known as "disgorgement" is subject to a five-year statute of limitations. The justices sided with New Mexico-based investment adviser Charles Kokesh, who previously was ordered by a judge to pay $2.4 million in penalties plus $34.9 million in disgorgement of illegal profits after the SEC sued him.

(Reporting by Lawrence Hurley; Editing by Will Dunham)